Kali Digital Eco-Systems, the parent company of Indian cryptocurrency platform CoinRecoil has now filed a writ petition in the Delhi High Court against the Reserve Bank’s decision to restrict banking services to those dealing with cryptocurrencies in India. The company has said that such an order from India’s apex banking authority is unconstitutional as it violates several articles of the Indian Constitution.
For those who may not be aware of the incident, earlier this month, the Reserve Bank of India, which is the central banking authority in the nation - had issued a circular asking all regulated financial institutions to stop providing services to organizations as well as individuals which deal with cryptocurrency exchanges. This caused quite a bit of panic in the Indian cryptocurrency markets - as it basically implies an indirect ban on cryptocurrency trade in the nation.
“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs (virtual currencies). Regulated entities which already provide such services shall exit the relationship within a specified time.” the RBI circular reads.
This writ petition filed by Kali Digital claims that this ruling violates Article 19 (1)(g) of the Indian Constitution, which gives citizens the right to practice any profession, occupation, trade or business of their choice. It also violates Article 14 of the Indian Constitution, which gives everyone equality before the law.
“On account of the impugned circular, the petitioner will not be able to avail banking services to operate the cryptocurrency exchange ‘CoinRecoil’. Such banking services are imperative for the business of the petitioner. Consequently, the business... is stillborn,” read the writ petition.
In addition to these two articles, Article 301 of the Indian constitution is also being violated, as per Mohit Singh, CEO of Ovakil.com, which is the legal advisor to many of these cryptocurrency firms affected by the RBI’s decision.
This writ petition filed by Kali Digital has the Reserve Bank, the Indian Finance Ministry, as well as the GST Council, marked as respondents. The Reserve Bank has been named because it was the RBI which issued this circular. The Finance Ministry has been named a respondent because it authorized the RBI by giving it the power to issue such circulars - and the GST council has been named because there is a lack of clarity on tax laws for cryptocurrency exchanges.
Cryptocurrency traders have also been launching various campaigns, including an online petition which has gathered close to 20,000 signatures. Interestingly, the Reserve Bank also pointed out that they are considering the possibility of creating their own cryptocurrency, which would be India’s legally regulated cryptocurrency - which may possibly even get the status of a legal tender in the nation.