"There's A Grey Area On Legality Of Bitcoins", Says Supreme Court While Hearing Plea Of GainBitcoin Scam Accused

"There's a grey area on legality of bitcoins. Interim protection extension can be confirmed..its your prerogative. If you declare it as illegal, it's up to you... ", a bench comprising of Justices  Indira Banerjee,  Surya Kant and MM Sundresh observed.

On February 25 as well, while hearing the case, the Court had asked the Centre to clarify the legal status of cryptocurrencies.

During the hearing, senior counsel Sidhartha Dave appearing for the petitioner submitted that the previous orders of the Court were complied with.

In April, the Supreme Court had pulled up Bhardwaj for not complying with the direction to disclose user name and password of Crypto Currency Wallets to Enforcement Directorate (ED).

On March 28, 2022 the bench had asked Bhardwaj to make full disclosure to the Enforcement Directorate the usernames and password of the crypto currency wallet for getting interim protection. Subject to Bhardwaj making full disclosure of the username and passwords of the crypto currency wallets, the Top Court had directed for continuation of the interim protection which was granted to Bhardwaj.

But ASG Aishwariya Bhati disputed this, saying that investigation had continued and that the petitioner had not co-operated with some important aspects.

Dave further told the Court that the Pune Police, who had sought his custody are now facing charges for embezzlement of the bitcoins.

"The Pune Police who want my custody have embezzled the bitcoins and are facing prosecution. We have given them the password, everything. "

While Dave questioned how a criminal complaint is maintainable in a contractual transaction, ASG Bhati opined that the bitcoin transactions were part of a larger ponzi scheme.

This was refuted by Dave.

"Ponzi scheme should have some value. Government says that for bitcoins, there's no value.... "

"Instead of scattered investigation, let one agency investigate", the bench advised, while asking ASG Bhati her choice of agency.

The ASG said that she would come back with instructions.

"An Agency which understands the transactions", Dave requested.

"An Agency which do not understand the Transactions will be better for you", the bench remarked, in lighter vein.

When ASG Bhati suggested to transfer all matters to the CBI and dispose of the matters, the Bench adjourned the matter.

"It will be better if you take instructions. Then we will record your statement."

The Court also extended the interim protection from arrest to the petitioner, as the hearing drew to a close.

"Interim order to continue subject to petitioner co-operating in investigation."

Case Title: Ajay Bhardwaj v. Union of India and Ors| WP (Civil) 231/2019