Big Crypto Fraud: ‘We are no experts,’ Supreme Court orders probe into cryptocurrencies, says banning not a viable option

Big Crypto Fraud Update: In a significant development, the Supreme Court on Tuesday highlighted the need to regulate cryptocurrencies in the backdrop against instances of fraud reported in related technologies in several states. Stating that banning or restricting the use of cryptocurrencies is not a viable option to address the problem, the top court stated that crucial steps are need to ensure stern surveillance on such technology.

Justice Surya Kant and Justice NK Singh said that the court is no expert in the matter, directing an expert investigation into the matter.

Blocking cryptocurrencies completely from the economy is not an intelligent solution to this problem, given that there is no suggestion so far to completely ban these securities.

The imposition of a 30 per cent tax on Bitcoin trading is in a way legal validation of such virtual currencies, said the bench.

Under the current tax laws in India, earnings arising out of trading in virtual digital assets (VDAs)—or cryptocurrencies such as Bitcoin—attact a 30 per cent tax. Meanwhile, the Union Budget for 2025-26 introduces stricter tax norms and guidelines for taxpayers engaged in cryptocurrency trading.

“If cryptocurrencies are already being recognised by the system, then howcome they are not regulated yet?” asked the bench.

The courts are facing practical challenges in dealing with matters related to cryptos, said the judges.

The top court will hear the matter further on Friday, May 30.