Agencies, New Delhi
The Delhi High Court has issued notices to Reserve Bank of India (RBI), the Union Government and the GST Council on a plea challenging a recent circular of the RBI which withdrew banking support to Virtual Currency Exchanges like crypto currencies.
Admitting petition of Ahmadabad based crypto currency exchange CoinRecoil, the two-judge bench of Justices S Ravindra Bhat and AK Chawla issued notice to the RBI, the Union of India through Secretary, Ministry of Finance and GST Council. The next hearing in this case has been fixed on May 24 next month.
Crypto-currencies are digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds,operating independently of a central bank.
CoinRecoil requested High Court to issue of an appropriate writ, order or direction quashing circular issued by RBI to be arbitrary, unconstitutional and violative of Article 14 and Article 19(1)(g) of the Constitution of India.
“The move by the RBI has put the burgeoning crypto currency sector in jeopardy and may affect the basic rights of such entities to carry on any trade. The circular appears to be arbitrary and unconstitutional since it does not give strong facts as to why RBI is against the business of crypto currencies.
A logical and well thought arguments backed by solid facts are the primary requirements under the Constitution to put a stop to any business in India,” the counsel for the petitioner said.
In its petition the company said after the April 6 circular of the RBI,it will not be able to avail banking services, imperative for its business, to operate it.
Under the circular, entities regulated by the RBI have been prohibited from “providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies”, it has said.
For entities which are already providing such services, three months time has been given to them to cease such activity, the plea has said.
CoinRecoil in its petition has also included Union of India and Goods and Service Tax Council (GSTC) as respondents along with the RBI.
Government of India, represented through the Secretary, Ministry of Finance (Department of Economic Affairs) has granted powers to RBI to issue the impugned circular while GST Council have failed to introduce appropriate regulations with respect to cryptocurrencies in the Goods and Services Tax law, it said.
Kali Digital Eco-Systems Pvt Ltd is building FIAT-to-Crypto platform for buying, selling and storing digital assets with the trade name of CoinRecoil. Official launch of CoinRecoil is scheduled for August 2018. Company also plans to expand operations in Canada, Singapore, UAE and Australia.
Headquartered in Ahmadabad, Gujarat, company aims to address current challenges in crypto trading and make CoinRecoil – the first choice for anyone who thinks of investing in Crypto space by offering fundamentally strong coins and best trading features while also ensuring safe, secure and seamless trading experience for users.
CoinRecoil plans to have a browser and mobile apps integrated with secure wallets for its users which will enable customers to buy, sell, send, receive, or store all the supported crypto currencies. Starting with ten major cryptocurrencies, company will add more crypto currencies based on market demands.