The Reserve Bank of India’s decision which forbids banks from offering crypto services has received criticism. A complaint has been filed against the RBI regarding this decision by an Indian start-up that aims at launching a crypto exchange.
Ban Against ‘Constitutional Rights’
A ‘writ petition’ has been filed by Kali Digital Ecosystems against India’s Ministry of Finance, Goods and Services Tax Council, and the RBI; with the High Court of Delhi. The complaint is filed seeking “an appropriate writ, order or direction quashing the circular” which it describes as “arbitrary and unconstitutional.”
The restrictions imposed by the RBI makes it impossible for the start-up to operate, due to which they had to postpone the launch of their crypto exchange, CoinRecoil, which was initially scheduled for release in August 2018. The firm also mentioned in the petition that it had undertaken substantial investment owing to the nearing launch of the exchange.
The petition reads:
“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 of the Petitioner is stillborn on account of the Impugned Circular.”
Each firm has the constitutional right to practice any trade, business or profession and the decision taken by RBI violates Kali Digital’s right to do so.
RBI gives the crypto services “differential treatment,” and has no justification for the same, and hence, the firm strongly believes that the RBI is practicing discrimination.
RBI “Fails” To Understand Cryptocurrencies
Kali Digital Ecosystems argues that the absence of rationale – or fair regulation – towards cryptocurrencies is directly linked to the failure of the RBI in identifying and defining what exactly the scope of the term is.
As a result of this vagueness, the term ‘cryptocurrency’ is wrongly used and abused to brand “rewards programs,” like airline miles.
GST Council’s has been neglecting the crypto-specific tax laws and its uncertainty about the same is affecting the firm’s business in negative ways. The firm has appealed to the court and demands the council to come up with appropriate regulation on cryptocurrencies.
Before this circular, the RBI had already issued two warnings on cryptocurrency – one in 2013 and the other in 2017. However, while this chaos ensues, the RBI has revealed in the circular that it, it is churning out ideas as to how it can issue its very own digital currency.
This comes in contrast with its strict opposition to cryptocurrency. Who knows, it may be forbidding start-ups from issuing cryptocurrency with the aim of being its sole proprietor!
Earlier, BTCManager Reported Unfair Crypto Ban Against ‘Constitutional Rights’
Previously on April 10, BTCManager discussed how India’s move is “fundamentally void” after a reading of the Indian Constitution.
According to Article 12, any authoritative body under the Indian Government is to be treated as a “state,” which means it has all rights and powers to operate the same way as a geographic district or county. In the very next page, Article 13 consists of the “Laws inconsistent with or in derogation of the fundamental rights.”
Since the RBI is considered to be a “state” under Article 12 of the Constitution, the law prohibits any entity taking away a citizen’s fundamental rights; it is safe to say that the RBI is essentially forbidden to place such a ban on the country’s budding cryptocurrency industry. The ban itself is “void” under parliament rules.