India’s legal vigilance against crypto hits new highs as the Delhi High Court warned that it would threaten financial stability by dissolving recognized currencies into an opaque and untraceable financial system.
Delhi High Court flags the code as a systematic threat amid growing legal surveillance
Concerns over digital asset misuse intensifies in India after judicial warnings flagged crypto-powered capabilities to destabilize the legal financial system through opaque and untraceable flows. Judge Gilish Katpalia of Delhi High Court said cryptocurrency transactions could dismantle official currency devices into a system of untrackable funding, causing systematic economic concerns. The judge argued:
Transactions in cryptocurrency have a major impact on our country’s economy by disbanding recognized money into dark, unknown, untraceable money.
“The allegations against the accused in this multivicttim scam are very serious, even more serious in light of the antecedents involved in as many as 13 cases of a similar nature,” he added. The ruling also explained the broader risks posed by “dissolution into dark, unknown, untraceable money.”
The ruling reflects growing legal fears over the potential for destructive cryptography. By placing digital assets as financial risk rather than neutral tools, court stances can affect future enforcement. The accused’s long records on a similar scheme exacerbated judicial concerns and strengthened perceptions that crypto-related fraud was escalating. The court’s language shows a broader policy shift towards looking at technologies that require more scrutiny within legal and regulatory devices.
India currently has no specific cryptocurrency regulations, but government policies have been cautious. Cryptography and retention is legal, but it is not recognized as fiat currency. Recently, the Indian Supreme Court has sharply criticised the Indian government for failing to regulate cryptocurrency, comparing unregulated Bitcoin trading to an informal money transport system called “a refined form of hawara.”
The government implements a 30% capital gains tax and a 1% tax deducted at source (TDS) and has the exchange’s mandatory financial information unit registration. Finance Minister Nirmala Sitharaman highlights the need for global cooperation in the Crypto Rules, a theme that India has advanced during the G20 presidency. Meanwhile, Crypto Exchange Bybit has begun applying India’s 18% Goods and Services Tax (GST) to crypto services and transaction fees.
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