- Supreme Court dismisses petition seeking cryptocurrency regulatory guidelines, stating such matters fall within the legislature’s domain.
- Petitioners from the WazirX platform sought intervention after an alleged $230 million cyberattack affected their investments.
- The Court granted petitioners liberty to approach appropriate government authorities with their concerns.
The Supreme Court has dismissed a petition seeking guidelines for preventing and penalizing fraudulent cryptocurrency transactions, ruling that such regulatory matters fall under legislative jurisdiction. The bench comprising Justices BR Gavai and AG Masih determined that establishing a cryptocurrency regulatory framework exceeds the Court’s authority under Article 142 of the Constitution.
During proceedings, Justice Gavai clearly stated, "That is in the domain of policymakers, how can we issue any such directions? We can’t lay down the law." While dismissing the petition, the Court granted petitioners liberty to approach appropriate government authorities with their concerns.
The $230 Million WazirX Incident
The petition was filed by investors and registered users of WazirX, a cryptocurrency exchange platform, following a reported cyberattack that resulted in approximately $230 million in losses. According to the petitioners, WazirX unilaterally decided to distribute losses across its entire user base, including those who had not invested in the affected tokens.
The petitioners, represented by Advocates Anjali Anil and Radhika Prasad with Advocate Maitreyi S Hegde settling the case and Advocate-on-Record Priyanka Prakash filing it, argued that the incident wasn’t merely a security breach but "potentially an orchestrated crime facilitated by serious internal failures and regulatory lapses."
Regulatory Vacuum in Cryptocurrency
Petitioners’ counsel referenced the Internet and Mobile Association of India v. RBI decision, noting that while the Court previously recognized fundamental rights of cryptocurrency users and the tax law characterizes cryptocurrency as "property," no comprehensive regulatory framework exists to govern these digital assets.
"There are no laws in India to protect the users or the investors or the entrepreneurs dealing with cryptocurrencies," the petitioners contended, highlighting challenges including uncertain jurisdiction for disputes and unclear consequences for non-compliance with KYC requirements.
When petitioners suggested the Court could issue guidelines to fill the legal vacuum, similar to the Vishakha case, Justice Gavai responded that the Supreme Court cannot issue guidelines for every matter. The case (HAJARIMAL BATHRA AND ORS. Versus UNION OF INDIA AND ORS., W.P.(Crl.) No. 161/2025) was ultimately dismissed, with the Court recommending petitioners make representations to appropriate governmental authorities.
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