Indian Court Reaffirms Legality of Cryptocurrency, Grants Bail to Yes World CEO

The Orissa High Court in India has reaffirmed that cryptocurrency trading and transactions are neither banned nor deemed illegal in India. Citing the legality of crypto, the court granted bail to Sandeep Chowdhury, CEO of Yes World, who was accused of defrauding investors through a Ponzi scheme disguised as a cryptocurrency business.

Orissa High Court Highlights Legality of Cryptocurrency

The Orissa High Court in India has affirmed that cryptocurrency is not illegal in India. Justice Aditya Kumar Mohapatra, presiding over a single judge bench, granted bail to Sandeep Chowdhury, CEO of Yes World, on July 30, citing the absence of any official ban or illegality regarding cryptocurrency trading in the country. Chowdhury was detained for allegedly defrauding investors through a Ponzi or multi-level marketing scheme disguised as a cryptocurrency business.

Justice Mohapatra stated on Tuesday:

This court on a careful analysis of facts and materials on record is of the view that trading or transacting in cryptocurrency has not been declared illegal as of now in the country either by the government of any statutory authority. Therefore, mere trading in cryptocurrency cannot be held to be illegal at this juncture.

He emphasized that cryptocurrency is a nationwide phenomenon in India, as highlighted by a Supreme Court judgment on March 4, 2020, which confirmed that the central bank, the Reserve Bank of India (RBI), has not banned virtual currency and the government has yet to make a decision on the regulation of crypto.

Chowdhury was arrested by the Economic Offences Wing on Nov. 17, 2023. Following the rejection of his bail plea by the designated court under the Odisha Protection of Interests of Depositors (in Financial Establishments) Act in Cuttack, he sought regular bail.

The Orissa High Court in India has previously ruled that cryptocurrency dealings are not illegal under Indian law. In June, Justice Sasikanta Mishra clarified that cryptocurrency is neither considered money under the Prize Chits and Money Circulation Schemes (Banning) Act nor a deposit under the Odisha Protection of Interests of Depositors Act, thus making mere cryptocurrency dealings non-offenses under these laws.

India currently lacks specific cryptocurrency regulations, but the government imposes heavy taxes on crypto transactions. Gains from Virtual Digital Assets (VDAs) are taxed at 30%, and users cannot offset losses against gains as they can with stocks. Additionally, a 1% Tax Deducted at Source (TDS) on digital asset transactions further impacts traders.

What do you think about the Orissa High Court’s decision to grant bail to Sandeep Chowdhury citing that crypto transactions are not illegal in India? Let us know in the comments section below.

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