Yet to finalise mechanism for regulating cryptocurrencies: Centre to SC

The Centre has told the Supreme Court it is yet to take a decision on a mechanism to regulate cryptocurrencies and effectively investigate related offences.

A bench of justices Surya Kant and KV Viswanathan was told by Additional Solicitor General Vikramjit Banerjee, appearing for the Centre, that the issues related to the digital currency are continuously evolving and the government is deliberating on the mechanism to regulate the cryptocurrencies.

He sought time to file an affidavit by the next date of hearing in the case giving updated position on the mechanism.

"So far as the stance of the Union of India with reference to the matters of cryptocurrency arising in different states is concerned, the Additional Solicitor General of India seeks and is granted four weeks' time to file an appropriate affidavit," the bench ordered on Friday.

During the hearing, Justice Kant said the court only wants that there are appropriate safeguards to protect the common man from frauds and misuse of cryptocurrencies.

"We are not experts on what kind of currencies you should have or regulate. If there is no mechanism to regulate it, then anyone can create a currency and start transacting in it. It will be very dangerous," the bench told Banerjee.

The ASG assured that deliberations are going on but it's an evolving question and he will file an affidavit giving details of it on the next hearing of the matter.

The bench posted the matter for further hearing on March 21.

It was hearing a bail plea of one Ganesh Shiv Kumar Sagar booked for cryptocurrencies fraud in various states like Jharkhand, Maharashtra and Gujarat. He has also sought clubbing of various FIR lodges against him in different states.

The top court made the interim protection from arrest granted to him on July 27, 2023 as absolute after counsel for the Jharkhand government submitted that he has joined the probe into the case and fully cooperating with the investigating officer.

The counsel for Sagar submitted that he undertakes to continue to appear before the Investigating Officer as and when required till the investigation reaches a logical conclusion.

On September 21, 2023, Attorney General R Venkataramani, appearing for the Centre, said that the matter requires in depth consideration at the level of the Union of India keeping in view the domestic and international perspective.

He had submitted that due deliberations will be made within two-three months and this Court shall be apprised with the outcome at the earliest.

On July 27, 2023, the top court had impleaded Ministry of Home Affairs in the case and asked Banerjee to file a counter affidavit suggesting some comprehensive mechanism for effective investigation of the offences relating to cryptocurrency or alike.

It had granted protection from arrest to Sagar in a case registered at Ranchi.