New Delhi — The Supreme Court on Monday pulled up the Central Government over its prolonged inaction in regulating cryptocurrencies in India, particularly Bitcoin

The observations came during a hearing on the bail plea of Shailesh Babulal Bhatt, who was arrested for alleged involvement in illegal Bitcoin transactions.

The Supreme Court on Monday pulled up the Central Government for its prolonged inaction in regulating cryptocurrencies in India, particularly Bitcoin.

A bench, comprising Justices Surya Kant and N. Kotiswar Singh, observed that the current situation—where no clear policy or regulatory regime exists—makes Bitcoin trading look like a sophisticated version of the Hawala system.

The observations came during a hearing on the bail plea of Shailesh Babulal Bhatt, who was arrested by the Gujarat Police and the Enforcement Directorate (ED) for alleged involvement in illegal Bitcoin transactions. The bench noted that it had earlier asked the Centre to clarify its stand on virtual currencies, but no framework has yet been presented to the court.

“You see, trading in Bitcoin in India is like dealing with a refined way of Hawala business. There are no regulations at present. I have a limited technical understanding of Bitcoin. They say it’s like a token—if you have Bitcoins, you can buy goods in other countries. But the government has to quickly decide on a policy for regulating this industry,” Justice Surya Kant remarked.

Senior Advocate Mukul Rohatgi, appearing for Bhatt, argued that Bitcoin trading is not illegal, citing the 2020 Supreme Court ruling that struck down the RBI’s circular banning banking services for crypto exchanges. He added, “Bitcoin has enormous value; on Sunday, it was worth ₹82 lakh,” while also conceding his limited grasp of crypto mechanics.

To which, Justice Kant responded, “All I understand is there are some genuine Bitcoins and some fake ones. If there was a regulatory regime, such issues would not arise.”

The apex court had earlier granted 10 days to the Gujarat Police and the ED to submit their response to Bhatt’s bail plea, listing the matter for hearing on May 19.

Bhatt, who has been in custody since August 14, 2023, is challenging the February 25, 2025, Gujarat High Court order denying him bail. He claims he is being wrongfully incarcerated despite the lack of regulatory clarity on cryptocurrency trade in India.

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The case once again underscores India’s regulatory vacuum on cryptocurrency. Back in January 2024, the Centre informed the apex court that it was still deliberating on creating a legal mechanism for regulating crypto assets and on offenses to be investigated by the police and the CBI.

It’s worth noting that as far back as February 2022, the Supreme Court had asked the Centre to specify whether cryptocurrency trading was legal in India—especially concerning Bitcoin and other virtual currencies used in high-risk investments. The absence of a clear framework has led to conflicting interpretations of legality, often leaving law enforcement and investors in a state of uncertainty.

The apex court’s observations on Monday come at a critical juncture as it underscores the urgent need for the government to present a long-pending policy and protect citizens from financial exploitation in the crypto space.