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A group of bitcoin traders has filed a writ petition in the Supreme Court against the Reserve Bank of India’s order to banks to withdraw services to trade cryptocurrencies, arguing that the regulator was blocking “essential services” as virtual currencies are not banned in the country.
On Monday, the Economic Times in India reported that petitioners under the latest effort to have the bank reverse its directive or stay it are of the opinion that they should continue to utilise banking services, as cryptocurrencies are not illegal in the country.
“Banking is an essential service. How can one deny access to an essential service when I am not doing anything illegal? You have not declared Virtual Currencies illegal in the country.”
The writ petition filed by a group of 11 different representatives from various crypto-related businesses challenges the constitutional validity of the RBI’s decision. The Supreme Court has issued notices to the RBI and Union of India after hearing the petition on May 11.
The writ petition – Rajdeep Singh v Reserve Bank of India – is the fourth such petition against the banking regulator for blocking off banking services to cryptocurrency exchanges in India. The Delhi High Court will hear on May 24 two petitions – Kali Digital Eco-systems and moneytradecoin, both cryptocurrency exchanges who have opposed the RBI circular on similar grounds.
On May 8, another joint writ petition was filed by four cryptocurrency exchanges in the Supreme Court against the RBI circular. Earlier this year, the government set up a committee under Subhash Chandra Garg, secretary, Department of Economic Affairs, that is currently working on a framework to regulate cryptocurrencies. The committee is yet to come out with its decision. “The RBI has given an affidavit saying that there is a committee at the highest level in the finance ministry examining virtual currencies.. Coming up with a circular while awaiting a decision has a chilling effect on any kind of business dealing with virtual currencies,” the petitioner said.
Banks in India have until July 5 to be compliant with the central bank’s directive, hence the rush by cryptocurrency exchanges and traders to challenge the bank’s decision. On May 24, the Delhi High Court will further hear from two exchanges, Kali Digital Eco-systems and MoneyTrade Coin, which are both challenging the central bank’s move.
Bitcoin traders and other cryptocurrency exchange companies have in the past few months dragged the Indian Apex Bank to court for its decision. Earlier this month, Flintstone Technologies Private Limited which operates the MoneyTrade Coin exchange challenged India’s bitcoin banking ban, following up on the first challenge by digital asset trading platform CoinRecoil in the High Court of Delhi.
Last week that four other Indian cryptocurrency exchanges had jointly filed a Writ Petition (Civil) no. 373 of 2018 under Article 32 of the Constitution challenging the constitutional validity of the Central Bank’s Circular. These include Coindelta Exchange, Koinex Exchange, Throughbit Exchange and CoinDCX.
Although the ban on Indian banks has had wide effects on cryptocurrency trading in India, virtual currency exchanges and traders in the country have pivoted to crypto-to-crypto trading as they scramble for ways out of glitches occasioned by the RBI directive.
“Even if there was no RBI circular, the crypto to crypto product would have happened. However, because of the circular and the fact that fiats may no longer be in the picture, it definitely did hurry up and encourage the solution sooner,” said Ajeet Khurana, the CEO of Zebpay.