Supreme Court calls crypto laws obsolete, urges govt to act on regulation

In earlier hearings, the Supreme Court likened unregulated Bitcoin trade to hawala, warning that the absence of clear rules creates opportunities for misuse and poses serious financial risks

The Supreme Court on Friday observed that India’s current laws are “completely obsolete” when it comes to dealing with cryptocurrencies, like Bitcoin. The top court noted that there is a “grey area” in how these digital assets are regulated and asked the government to take steps to address the issue.

 

A bench of Justices Surya Kant, Dipankar Datta, and Vijay Bishnoi was hearing a case involving Gujarat-based businessman Shailesh Babulal Bhatt, who is accused of Bitcoin-related fraud in multiple states, Live Law reported. 

 

Senior advocates Siddharth Dave and Mukul Rohatgi, representing Bhatt, reminded the court that it had earlier asked the Attorney General of India about a proper regulatory system for cryptocurrencies.

 

“When we were asking them that have some regulatory mechanism, a very, very sweeping statement was made – ‘no, no, we are watching, we are looking at the international economic conditions’...” Justice Kant observed, as quoted by Live Law.

 

This is not the first time the Supreme Court has highlighted the need for clear cryptocurrency laws. In earlier hearings, it compared unregulated Bitcoin trade to hawala transactions and warned that the lack of rules makes it easy for people to misuse the system.

 

Background of court’s stance on crypto

 

In November 2023, the Supreme Court dismissed a petition asking for guidelines on trading and mining cryptocurrency. The SC bench had said, “Parliament will do it, we will not issue any directions.”

 

In January 2024, the top court gave the Union Government time to state its position on cryptocurrency issues, especially in cases happening across various states. In April 2025, another bench said that the matter falls under policy and not judicial decision-making, advising the petitioner to approach the proper authority.

 

Govt to release discussion paper on crypto policy

 

Meanwhile the Central government may release a discussion paper next month to explore policy options for crypto assets, according to a report by The Economic Times.

 

This comes amid rising global acceptance of digital currencies, especially after former US President Donald Trump publicly voiced his support for them.

 

According to the report, the paper will draw on insights from a study by the International Monetary Fund and the Financial Stability Board, and will also gather perspectives on how various countries are regulating cryptocurrencies.

 

“The discussion paper on crypto assets is being given finishing touches,” an official told The Economic Times. The paper could be posted for public comments as early as next month.