India’s Supreme Court has raised serious concerns about the central government’s continued delay in introducing a clear regulatory framework for cryptocurrencies. During a hearing on May 20, 2025, the court questioned the logic of imposing a 30% tax on crypto gains without having any formal rules in place, noting that such taxation indirectly suggests government recognition of crypto assets.
The bench, led by Justices Surya Kant and N. Kotiswar Singh, warned about the dangers of leaving the crypto market unregulated, comparing it to informal financial systems like hawala, which function outside official banking channels. They stated that while banning cryptocurrencies entirely may not be wise due to their global presence, a well-structured regulatory framework is urgently needed to protect both the financial system and investors.
These remarks come amid rising instances of crypto-related fraud and growing confusion due to the absence of legal clarity, which has hampered effective enforcement. The court urged the government to engage with domain experts and accelerate the creation of comprehensive crypto laws.
Responding to the court, Additional Solicitor General Aishwarya Bhati acknowledged the concerns and said she would seek guidance from the Centre. The court also noted that the government’s earlier promise of a crypto policy paper by September 2024 remains unfulfilled, further highlighting the need for swift regulatory action.
