The Supreme Court of India has asked the Centre to clarify if cryptocurrencies are illegal or not in the country. A Bench of Justices DY Chandrachud and Surya Kant asked the Narendra Modi-led government to make its position clear on legality of cryptos while hearing a case related to the Rs 20,000-crore GainBitcoin scam.

In 2018, Amit Bhardwaj and his brother Vivek (both accused in the GainBitcoin scam along with another brother Ajay), were held at Delhi's IGI airport in connection with an alleged Ponzi scheme under which they duped more than 8,000 people from across the country.

An initial estimate of the GainBitcoin scam was pegged at Rs 2,000 crore. Bhardwaj promised higher returns to investors who gave him Bitcoins and also offered them Bitcoin mining hardware.

On Friday, Central government representative Additional Solicitor General (ASG) Aishwarya Bhati informed the SC that the GainBitcoin scam involves almost 87,000 bitcoins.

"Is it (crypto) illegal or not? You have to make your stand clear," the bench asked the ASG.

The country has not made its stand clear on the legality of cryptocurrencies although a 30 percent tax was levied on gains made through such digital assets during Budget 2022. Finance Minister Nirmala Sitharaman later made it clear that taxing gains made via digital assets does not make cryptocurrencies legal tender and that the government is still working on a Bill on cryptocurrencies.

In the February monetary policy review, the Reserve Bank of India governor Shaktikanta Das also said that “cryptocurrencies have no underlying asset, not even a tulip”.

The cryptocurrency community in India, meanwhile, continues to grow despite no clear communication from the government or the Reserve Bank of India. Many exchanges have also stated roping in big celebrities and taking non-conventional ways of advertising through social media platforms.

Considering this, India's self-regulatory advertising body ASCI has made it mandatory for all ads on cryptocurrencies and non-fungible tokens to carry a "prominent and unmissable" disclaimer that says, "crypto products and NFTs are unregulated and can be highly risky" from April 1.

First Published:Feb 25, 2022 12:39 PM IST