Ahmedabad-based crypto firm Kali Digital Eco Systems, which runs a cryptocurrency exchange platform named CoinRecoil, has approached the Delhi High Court filing a petition against the Reserve Bank of India (RBI) recent guidelines which have banned banks from dealing with Indian cryptocurrency purchase/exchanges.
In the first week of this month, the RBI had released a statement directing all regulated entities, including banks, e-wallets, and payment gateway providers, to stop dealing with individuals and businesses in the partially banned cryptocurrencies.
The crypto firm states that the central bank guideline violates Articles 19 (1) (g) and 14 of the Constitution. Under Article 19(1) (g) of the Constitution, citizens enjoy the right to carry on any occupation, trade or business, while Article 14 prohibits discrimination between equals and Article 14 relating ‘Equality Before Law’ states that the State shall not deny any person equality before the law or the equal protection of the laws within the territory of India, prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.
While the respondents, in this case, are RBI, the Indian government and the GST Council, the next hearing is on May 24, 2018. The writ petition states, “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 is stillborn,”
Mohit Singh, CEO of Ovakil.com, which acts as a legal advisor to many cryptocurrency players, said, “With this RBI restriction on banks to transact with cryptocurrency traders and exchanges, Article 301 of Indian Constitution also gets violated,”
According to Article 301, the freedom of trade and commerce is guaranteed throughout India. Singh said that in order to prevent banks from dealing with cryptocurrencies the government needs to ban the entity first, without which such a move from the central bank could be running in contravention to the law.
With this recent clampdown by the RBI, the cryptocurrency exchange platform within the country have been seeing really tough times as to if they should even keep their business continued or move overseas. With this petition filed against RBI, tables can turn and cryptocurrency purchases may be authenticated again via banks.