New Delhi, May 30 (Reporter) The Supreme Court on Friday highlighted the urgent need for a robust regulatory framework on cryptocurrency, observing that the current legal provisions are “completely obsolete” and unable to address complex issues arising from the use and misuse of digital assets like Bitcoin. A bench comprising Justices Surya Kant, Dipankar Datta, and Vijay Bishnoi made the remarks while hearing a plea filed by Gujarat-based businessman Shailesh Babulal Bhatt, an accused in multiple cryptocurrency-related fraud cases across several states. “There exists a grey area in the field of bitcoin/cryptocurrency regulation and the existing laws are completely obsolete. They cannot address this issue,” the court noted during the proceedings. Senior advocates Siddharth Dave and Mukul Rohatgi, appearing for the petitioner, emphasised that the apex court had earlier asked the Attorney General of India to clarify the Centre’s position on regulating cryptocurrencies. Referring to that exchange, Justice Kant recalled, “When we were asking them to have some regulatory mechanism, a very, very sweeping statement was made — 'no, no, we are watching, we are looking at the international economic conditions'...” Rohatgi also pointed out that recent international developments — including the reported involvement of the U.S. President in cryptocurrency ventures — underscore the relevance of the issue. Justice Kant, turning to Additional Solicitor General Aishwarya Bhati, commented, “Different jurisdictions are saying different things about it. Some grey area is there, and the existing laws are completely obsolete.” ASG Bhati clarified that the issue in the present case was not Bhatt’s involvement in cryptocurrency per se, but rather his alleged criminal misuse of it, specifically extortion and fraud. However, the bench emphasised that their broader concern was the lack of regulation, stating, “This case we will resolve either way… our problem is (regarding the regulatory framework)… do something about that.” The court has, in earlier hearings too, cautioned against a blanket ban on cryptocurrencies and stressed the need for intelligent regulation, comparing unregulated Bitcoin trading to hawala operations. It expressed that the absence of clear rules increases the potential for abuse. Arguing on the facts of the case, Rohatgi contended that the petitioner had cooperated with the investigation and appeared before agencies on 15 occasions before his arrest in August, 2024. He claimed Bhatt had registered FIRs against local police officers for extortion and kidnapping involving Bitcoins, after which retaliatory FIRs were lodged against him. Yet, he added, Bhatt was not charge-sheeted in either of the subsequent FIRs. In one of the two FIRs where charges were filed, co-accused persons were named but not Bhatt, Rohatgi noted. He also submitted that while the Enforcement Directorate (ED) named Bhatt in its ECIR, he was not included in the agency’s first prosecution complaint. ASG Bhati opposed bail, arguing that the investigation was at a critical stage and Bhatt remained non-cooperative. “He initially claimed to be an investor, but has shown no documents to support this. His is a case purely of extortion,” she told the bench. She also explained that although KYC (Know Your Customer) compliance is now mandated for Bitcoin wallets, enforcement is difficult with non-KYC-compliant platforms. After hearing both sides, Justice Kant stated, “We will not comment that there is nothing against you (petitioner) or something… we will take up the matter in July. (To the authorities) You complete, meanwhile, whatever investigation…” The Supreme Court has addressed the issue of cryptocurrency regulation in several past hearings. In November 2023, a bench led by then Chief Justice DY Chandrachud declined to issue guidelines for trading and mining of cryptocurrencies, holding that such matters fall under Parliament’s domain. A similar petition was dismissed in April 2025 by a bench of Justices BR Gavai and AG Masih, which held that the issue involves policy considerations and directed the petitioner to make a representation to the appropriate authority. In earlier instances, too, including January 2024, the Court granted interim protection in crypto-related matters and directed the Union Government to clarify its regulatory stance. However, no formal legal framework has yet been put in place. The matter will now be heard in July...////...