Supreme Court Labels Bitcoin Trading as Modern Hawala

The Supreme Court of India compared Bitcoin trading to a refined form of Hawala due to the lack of a clear regulatory regime. This remark surfaced during a bail hearing for Shailesh Babulal Bhatt, arrested for alleged illegal Bitcoin trade, questioning the legitimacy of cryptocurrency transactions in India.

The Supreme Court of India, on Monday, drew parallels between Bitcoin trading and Hawala operations. This comparison stems from the ongoing absence of a definitive regulatory framework from the Centre concerning virtual currency.

The hearing, concerning Shailesh Babulal Bhatt's bail application, unveiled these remarks, where a judicial bench referred to the enforcement lacunae. The bench highlighted two years of requesting a clarification on cryptocurrency regulations, with no significant updates from the Centre.

The discourse also involved Senior Advocate Mukul Rohatgi, representing Bhatt. Despite the quashing of a Reserve Bank of India circular by the apex court, which implied trading was not illegitimate, Rohatgi argued Bhatt's arrest was unwarranted. The state and the Enforcement Directorate have been given a 10-day window to respond, with a follow-up hearing scheduled for May 19.

(With inputs from agencies.)