Cryptocurrency firm may move Supreme Court

Ahmedabad-based crypto firm Kali Digital Ecosystems may approach the Supreme Court to bring forward its next hearing on the Reserve Bank of India’s (RBI’s) circular prohibiting banks from dealing with cryptocurrencies.

This is because the central bank has asked all the lenders to wind up dealings by July 6. The hearing is slated for July 20.

Alternatively, the company is also exploring a strategy of going to the RBI to put off its diktat to lenders unless the apex court comes out with its order.

“We are exploring options to either go to the Supreme Court or RBI in this matter,” a source close to the company said.

The Supreme Court had recently transferred all petitions to itself and posted the matter to July 20. It barred all high courts from entertaining pleas relating to an RBI circular prohibiting dealings in virtual currencies.

As such, a petition filed by Kali Digital Ecosystems in the Delhi High Court has also been transferred to the Supreme Court. Kali runs a cryptocurrency exchange platform named CoinRecoil.

In its plea to the high court, Kali said the RBI circular is a violation of the freedom to trade, enshrined under Article (1) (g) of the Constitution.

The source in the company said the July 20 date for hearing defeats the purpose since banks have to wind up their dealings by July 6, according to RBI’s directions.

Rashmi Deshpande, associate partner with Khaitan & Co, said the Supreme Court recently transferred the entire batch of petitions pending at the high courts with respect to the contentious issue of RBI’s ban on transactions in cryptocurrencies.

“This decision highlights the importance of this issue at the national level from not just a legal, but also an economic point of view. We strongly believe that the RBI’s circular to effectively discourage the business of cryptocurrencies exchanges is an arbitrary decision against the freedom of right to trade guaranteed by the Constitution,” she said.

A circular issued by the RBI on April 6 says that regulated entities which already provide such services (dealing with virtual currencies) “will exit the relationship within three months from the date of this circular.”