Dealing in cryptocurrencies is not considered unlawful under Indian law, according to the Orissa High Court. Justice Sasikanta Mishra rendered the ruling. The Yes World Token, a fake cryptocurrency, was the foundation of a suspected Ponzi scheme.
Justice Mishra has verified that cryptocurrencies do not constitute “money.” Consequently, investments in these digital assets cannot be considered deposits under the Odisha Protection of Interests of Depositors (OPID) Act.
The court’s decision is consistent with the Indian government’s classification of cryptocurrencies as “Virtual Digital Assets.” This distinction suggests that, despite the fact that cryptocurrencies are not considered legal tender, they are still subject to financial regulations, such as a 1% Tax Deducted at Source (TDS) and a 30% tax on capital gains.
The court investigated the operations of a Ponzi scheme. The program offered substantial returns to investors who were capable of recruiting new participants. The investors were to receive interest or incentives that were proportional to the number of recruits they introduced.
Nevertheless, Justice Mishra observed that there was no direct transmission of funds to the administrators of the scheme. The funds remained in the trust accounts of the investors, suggesting that the accused did not have any fraudulent intent or direct gain.
The judge did not make any charges against the duo, as there was no evidence of their dishonest inducement to compel participants to surrender property or money. A lack of evidence of any fraudulent inducement was the basis for this decision. Furthermore, the existence of funds in personal purses directly contradicted any allegations of fraud. Consequently, the court determined that the initial evidence was insufficient to support an allegation of deception and dishonesty under Section 420 of the Indian Penal Code. This absence of substantiation impeded the confirmation of the allegations.
The decision is consistent with India’s endeavors to establish more transparent regulations for cryptocurrency operations. It is indicative of the authorities’ dedication to the establishment of a more organized legal framework for digital currencies. The objective of India is to establish a secure and regulated market for digital assets by actively pursuing the implementation of licensing for cryptocurrency service providers.
The Orissa High Court’s decision is a substantial advancement in the clarification of the legal framework for cryptocurrency in India. The legal framework directly establishes that cryptocurrency transactions are permissible and not criminal when initiated legally and without fraud. This confirms that the law officially sanctioned compliant crypto dealings and did not categorize them as offenses. This determination will have an impact on the management and view of digital assets in the wider picture of Indian financial law.
Also Read: Trezor Unveils New Wallet and Onboarding Assistance for Beginners
Wallets