The Orissa High Court has declared that dealing in cryptocurrencies is not illegal under Indian law. Justice Sasikanta Mishra delivered the decision. The case involved a suspected Ponzi scheme built around a fake cryptocurrency called the Yes World Token.
🚨 BREAKING: 🇮🇳 The Orissa High Court in India ruled that #crypto dealings are not illegal under Indian law 🔥 pic.twitter.com/S0oE98LwKA
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— Keyur Rohit (@CryptoKingKeyur) June 14, 2024
Court’s Stance on Cryptocurrency as Currency
Justice Mishra confirmed that cryptocurrencies do not qualify as “money,” and therefore, investments in such digital assets cannot be deemed deposits under the Odisha Protection of Interests of Depositors (OPID) Act.
The court’s decision aligns with the Indian government’s classifying cryptocurrencies as ‘Virtual Digital Assets.’ This distinction implies that while cryptocurrencies are not legal tender, they are still subject to financial regulations, including a 1% Tax Deducted at Source (TDS) and a 30% tax on capital gains.
Details of the Ponzi Scheme Case
The court examined the operations of a scheme typical of a Ponzi setup. The scheme promised high returns to investors who could recruit new participants. The investors were to be compensated with interest or bonuses proportional to the number of recruits they brought.
However, Justice Mishra noted no direct transfer of funds to the scheme’s operators. The funds stayed in the investors’ trust wallets, indicating no direct gain or fraudulent intent by the accused.
The duo faced no charges; the judge found no proof of their dishonest inducement to make participants surrender property or money.This decision was based on a lack of proof of any fraudulent inducement. Furthermore, funds in personal wallets directly refuted any accusations of fraud. Therefore, the court determined inadequate initial evidence to substantiate a charge of cheating and dishonesty under Section 420 of the Indian Penal Code. This lack of evidence prevented the confirmation of charges.
Orissa High Court Boosts Crypto Regulation
The ruling aligns with India’s efforts to establish clearer regulations for cryptocurrency operations. It reflects the authorities’ commitment to developing a more structured legal framework for digital currencies. India is actively working towards implementing licensing for cryptocurrency service providers, aiming to ensure a secure and regulated market for digital assets.
The Orissa High Court’s decision is a significant step in clarifying the legal landscape for cryptocurrency in India. The legal framework clearly states that cryptocurrency transactions, conducted legally and without fraud, are permissible and not criminal. This confirms that the law officially sanctions compliant crypto dealings and does not classify them as offenses. This decision will influence the perception and management of digital assets within the broader context of Indian financial law.
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