Tue May 06 01:59:11 UTC 2025: ## Supreme Court Criticizes India’s Lack of Bitcoin Regulation
**New Delhi, May 6, 2025** – The Supreme Court of India criticized the government’s inaction on regulating virtual currencies, specifically Bitcoin, calling its current status akin to an unregulated “refined Hawala” system. The court made these remarks during a bail hearing for Shailesh Babulal Bhatt, arrested for alleged illegal Bitcoin trading.
The court noted that despite previous requests dating back two years, the central government has yet to establish a clear policy for regulating cryptocurrency transactions. While acknowledging the lack of clear illegality surrounding Bitcoin trading after the RBI’s previous circular was quashed, the justices highlighted the significant risks and lack of oversight. Justice Surya Kant stated that the absence of regulation creates a loophole ripe for misuse.
Bhatt’s lawyer argued that his client was wrongly arrested because Bitcoin trading isn’t explicitly illegal. However, the court countered that the unregulated nature of the market poses substantial concerns, comparing it to the informal money transfer system, Hawala. The court emphasized the need for regulatory clarity to address the potential for fraud and financial crimes associated with unregulated Bitcoin trading.
The Additional Solicitor General, representing the Gujarat government and the Enforcement Directorate, requested additional time to file a detailed response to the bail application, citing complexities beyond simple Bitcoin trading. The Supreme Court granted a 10-day extension, scheduling the next hearing for May 19. Bhatt, arrested in August 2024, remains in custody pending the outcome of the case. The court’s strong words highlight the urgent need for the Indian government to address the regulatory gap surrounding cryptocurrencies.
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