Indian Supreme Court Refuses Injunction
The Indian Supreme Court refused to grant petitioners an interim injunction against the country’s central bank, Reserve Bank of India’s (RBI’s) announcement which banned banking services firms from dealing with and in cryptocurrencies. This news was posted on Twitter on May 11 by Crypto Kanoon, a team of lawyers in India who are engaged in the analysis of cryptocurrency regulations and creating legal awareness about the industry.
Why the Petition for an Injunction?
Last month, the RBI had ordered all banks and other financial institutions to immediately stop all services related to cryptocurrencies. This move by the central bank of the country impacted a large number of startups and ventures that were directly linked to cryptos. The move was also met with public outrage.
Therefore, representatives from 11 different crypto-related businesses filed a petition with the Supreme Court of India, seeking an interim injunction against the circular released by the Reserve Bank of India.
An interim injunction is basically a legal provisional measure that either requires the party targeted in the petition to do something or to refrain from doing something – before the case goes to trial. In this case, the petition was requesting the Supreme Court to prevent the implementation of the ban on dealing with cryptocurrencies. However, the petition was denied and the case is now pending at the Supreme Court. Report say that the Court will hear the case again on May 17.
Fallout of the Ban
While the case awaits going to trial, the industry remains in suspended animation. However, experts from across the world have said that this is a very wrong – even stupid – move by the authorities. According to Tim Draper, fintech and Bitcoin expert, this move by the RBI could lead to a massive brain drain in the country as Indian entrepreneurs dealing in the cryptos and Blockchain technology could take their business out of the country to greener pastures.
Draper said that he approved of the Indian Prime Minister Narendra Modi’s crackdown on corruption, but he felt that restricting the growth of an entire industry by denying cryptos were a legal tender was a huge mistake.
Ban in another Part of the World
The Indian government is not the only one to try and ban dealings in cryptos. Earlier this year, the Chilean banks had also taken a similarly hard stance against cryptos in their country. However, on April 25, a consortium of exchanges in Chile were able to convince the anti-monopoly court to re-open bank accounts for the exchanges even while the case was being fought in court.