High Court Declares Crypto Transactions Legal in India
The Orissa High Court has issued a groundbreaking ruling, declaring that cryptocurrency dealings are not illegal under Indian law. This verdict arose from a case involving individuals accused of fraud through a Ponzi scheme. Justice Sasikanta Mishra clarified that cryptocurrency does not fall under the definitions provided in the Prize Chits and Money Circulation Schemes (Banning) Act or the Odisha Protection of Interests of Depositors Act (OPID), thus making mere cryptocurrency dealings non-offensive under these laws.
Clarification on Crypto Legality
In this significant judgment, the Orissa High Court addressed the legal status of cryptocurrency transactions. The case involved two individuals accused of defrauding people by promoting investments in a digital currency named Yes World Token, under the guise of a fake cryptocurrency company.
The primary legal issue was whether the activities violated the Prize Chits and Money Circulation Schemes (Banning) Act and the OPID Act. Justice Mishra, presiding over the single-judge bench, stated, “Cryptocurrency is not money within the meaning of the Prize Chits and Money Circulation Schemes (Banning) Act, and investments in cryptocurrency cannot be classified as deposits under the OPID Act.” He added, “Mere dealing in cryptocurrency cannot be treated as illegal in any manner. Hence, it cannot be treated as an offense under the OPID Act.”
Case Details and Ruling
The accused allegedly operated a fictitious cryptocurrency company, convincing individuals to invest in Yes World Token by creating trust wallets and promising high returns. This investment method required participants to recruit additional members, who were then promised bonuses or interest payments, mimicking multi-level marketing principles. This raised concerns about the legality of the scheme and investor protection.
Justice Mishra highlighted the absence of evidence suggesting that the accused had fraudulently induced anyone to deliver property to them. He emphasized that the investment method did not support cheating allegations since the invested amounts remained secure in the investors’ trust wallets. “Thus, the offense under section 420 does not appear, prima facie, to be made out,” concluded the judge.
This ruling clarifies the legal standing of cryptocurrency dealings in India, providing a significant precedent for future cases involving digital currencies.
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