New Delhi, May 21, 2025 — The Supreme Court of India has once again urged the central government to create a clear regulatory framework for cryptocurrencies and criticised the lack of policy despite the government imposing a 30% tax on crypto profits. During a hearing on May 20, 2025, Justice Surya Kant and Justice N. Kotiswar Singh expressed concern over the unregulated nature of cryptocurrency trading, calling it a “shining form of hawala”, an illegal money transfer system. The remarks were made while hearing the bail plea of Shailesh Babulal Bhatt, an accused in a cryptocurrency fraud case in Gujarat.
The bench highlighted that taxing crypto transactions without any regulatory framework is contradictory, and cautioned that it could lead to the development of “a parallel black market” that could destabilise the economy.
Justice Surya Kant said, “You can tax something but not regulate it is not right,” and urged the government to formulate a clear policy.
Additional Solicitor General Aishwarya Bhati informed the court that the government will present its stand on crypto regulation by July 2025, indicating that deliberations on the subject will continue.
This is not the first time the Supreme Court has raised concerns about this regulatory void. In November 2023, the court, headed by then Chief Justice DY Chandrachud, had dismissed a PIL seeking guidelines for crypto trading on procedural grounds. On May 6, 2025, the court once again compared bitcoin trading without regulation to hawala and stressed the need for a solid framework. The judiciary has consistently advocated regulating the rapidly growing crypto market with the advice of experts, especially when the government itself has recognised cryptocurrencies through taxation.
INDIA’S SUPREME COURT URGES REGULATION OF CRYPTOCURRENCY, RATHER THAN BANNING IT.
The Supreme Court’s thinking is in line with its landmark 2020 judgement in which it struck down a RBI circular that barred banks from facilitating crypto transactions. The decision made it clear that crypto trading is not illegal in India. The decision has since led to calls for regulating crypto rather than banning it. However, a discussion paper on India’s crypto policy that was expected to come out by September 2024 has been shelved so far. According to sources, the government is studying global crypto-friendly policies, including the US (under the Donald Trump administration).
As India’s crypto market matures, the Supreme Court’s frequent observations indicate that there is an urgent need for a concrete policy to deal with the risks and opportunities associated with digital currencies. The government’s response is expected by July, and all crypto stakeholders are eager to know the direction India will take in this complex area.
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