On July 27, India's Supreme Court criticized the federal government for its lack of cryptocurrency regulation, as reported by local media. The court expressed disappointment over the government's failure to issue clear guidelines regarding cryptocurrencies despite growing instance s of criminal activity involving them. As a result , the court directed the government to state whether it plans to establish a dedicated federal agency to investigate cryptocurrency-related crimes.
Judges Surya Kant and Dipankar Datta highlighted the urgency of the situation and emphasized the need for a national specialized agency to properly understand and investigate cryptocurrency cases. The court's remarks came during the hearing of petitions related to cryptocurrency fraud case s across different states of India. They urged the government to respond promptly regarding its ability to establish mechanisms to tackle such cases.
India's efforts to create definitive cryptocurrency regulations have been ongoing for several years. The government initiated work on a cryptocurrency bill back in 2018, following the Supreme Court's directions. However, the final draft of the bill is yet to be released, despit repeated assurances from the government over the past four years. In the meantime, while guidelines for cryptocurrencies remain absent, the government has implemented a cryptocurrency tax law, which will be effective from April 2022.
The introduction of the cryptocurrency tax law occurred during a period of rapid growth in India's cryptocurrency market, where it emerged as one of the leading markets with a surge in trading volumes and the rise of crypto unicorns. However, the tax laws had a significant impact on the market as many established companies chose to leave India due to the lack of regulatory clarity. The absence of clear guidelines from the government has hindered the growth and stability of the cryptocurrency sector in the country.
