Kali Digital Eco Systems from Ahmedabad, which operates a cryptocurrency exchange platform called CoinRecoil has filed a petition to the Delhi High Court against the recent guidelines of the Reserve Bank of India (RBI), which prohibit banks from dealing in Indian cryptocurrency purchases/exchanges.
The RBI issued a statement in the first week this month directing all regulated entities (banks, ewallets and payment gateway providers) to cease dealing with individuals or businesses using partially banned cryptocurrencies.
According to the crypto firm, the central bank’s guideline violates Articles 19 (1)(g) and 14 Constitution. Article 19(1) (g), of the Constitution gives citizens the right to engage in any trade, occupation or business. Article 14 prohibits discrimination among equals. Article 14 relating “Equality Before Law” states that no State shall deny any person equality or the equal protection the laws within India. This includes the prohibition of discrimination based on religion, caste or place of birth.
The respondents in this case are the Indian government, the GST Council and RBI. The next hearing will be held on May 24, 2018. The writ petition states that Thj.
“The petitioner cannot use banking services to run the cryptocurrency exchange CoinRecoil” because of the impugned Circular. These banking services are essential for the petitioner’s business. The business is therefore stillborn.”
Mohit Singh, CEO at Ovakil.com which acts as a legal adviser to many cryptocurrency players, stated,
Article 301 of the Indian Constitution is also violated by this RBI ban on banks transacting with cryptocurrency traders and exchanges.
Article301 guarantees freedom of commerce and trade in India. Singh stated that to stop banks from dealing in cryptocurrencies, the government must ban the entity first. Without this, the central bank could be violating the law.
The RBI has recently clamped down on cryptocurrency exchange platforms in the country. This has caused them to think hard about whether they should keep their business going or relocate overseas. This petition against RBI can change the tables and crypto purchases could be authenticated via banks.
