On May 20, 2025, India's Supreme Court emphasized the urgent need for clear cryptocurrency regulation to align with current taxation practices. During recent hearings, Justices Surya Kant and NK Singh highlighted the impracticality of banning cryptocurrencies and the economic harm such actions could inflict. The court underscored the importance of establishing oversight frameworks to govern digital asset trading within India effectively.
CoinDCX CEO Sumit Gupta welcomed the court's remarks, describing them as a pro-crypto development, noting that a 30% tax on crypto profits represents implicit recognition of digital assets. Gupta emphasized that tax collection without corresponding regulatory rules is inconsistent and called for expert-driven policy design. Business leaders and legal experts anticipate an upcoming inter-ministerial discussion paper that could provide clarity.
The Supreme Court recounted previous debates, including a 2020 ruling that overturned the RBI's banking restrictions on crypto transactions due to the lack of comprehensive regulations. The justices questioned why, despite heavy taxation, the government has yet to provide a definitive regulatory stance. Additional Solicitor General Aishwarya Bhati committed to providing updates on investigation progress and government positions by July.
These developments have intensified the focus on India's crypto regulation framework amid ongoing criminal cases involving cryptocurrencies like Bitcoin and Litecoin. The court stressed that drafting regulations should involve experts with deep technological and market knowledge to balance fostering innovation and mitigating risks such as fraud and illegal activities.
Overall, the Supreme Court's direction signals a pivotal moment for India's crypto ecosystem, with hopes that thoughtful regulation will enable sustainable growth and enhanced market security.