Another organization moves HC against RBI circular on cryptocurrency

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Flintstone Technologies Pvt. Ltd, a company has involved in trading in cryptocurrencies has challenged a Reserve Bank of India (RBI) circular, in prohibiting banks and financial institutions from providing services to such cryptocurrencies, in the Delhi High Court.

The plea was on Friday listed for hearing before Justice Rajiv Shakdher, who asked the high court registry to place it before the bench, and it was already hearing a similar matter.

Maharashtra-based Flintstone Technologies had sought the withdrawal of the 6 April RBI circular, claiming that it is “arbitrary, unfair and unconstitutional”. The company has contended that the RBI circular has “fenced” all the entities regulated by the apex bank from providing services to any individual or business dealing in cryptocurrencies.

The company, which claims to provide an online crypto-currency digital wallet service for Bitcoin and Money trade coin both of cryptocurrency product – have contended that the RBI has not spelt out any reasons for imposing the restrictions.

Flintstone Technologies has additionally presented that, while the Center is examining the impact of cryptographic forms of money without forbidding it totally, the RBI has turned out with the circular to indirectly restrict the trade in virtual currencies.

On 22 April, the high court had looked for the reaction of the Center, the RBI and the GST Council on a Gujarat-based organization’s supplication, challenging the 6 April circular.

Gujarat-based Kali Digital Ecosystems Pvt. Ltd, which was proposing to embrace the business of operating a crypto-currency exchange system for the customers in India, has stated that it has already made investments in this regard and that it plans to roll-out the exchange system, called “Coin Recoil”, in August. Due to the RBI circular, it wouldn’t be able to operate the banking services, the petition filed by the company says.

According to the RBI, any type of service regarding cryptocurrency is prohibited, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies. Three month’s of time has been given to those entities already providing such services.

Flintstone Technologies has claimed that a lack of regulations on cryptocurrencies has “increased the uncertainty over the treatment of such transactions and is adversely affecting the proposed business of the petitioner”.

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