Cryptocurrency dealing is not illegal in India: Orissa High court

According to a local report, Justice Sasikanta Mishra of the Orissa High Court asserted that cryptocurrency is not considered money under Indian law.

The ruling pertains to a case involving two individuals accused of operating a Ponzi scheme centered around a fraudulent cryptocurrency called the Yes World Token. The scam targeted private individuals, promising them lucrative returns on their investments. 

Like any Ponzi scheme, users were incentivized to recruit more members, receiving interest or bonuses proportional to the number of new members they brought in. This multi-level marketing (MLM) approach helped the scheme create a vast network of users.

The accused allegedly created trust wallets, not to be confused with the popular cryptocurrency wallets of the same name. Interestingly, the accused were not charged. Justice Mishra observed that there was no evidence of direct money transfers from the investors to the accused. Instead, all funds stayed in the investors' wallets. Thus, there was no evidence of direct financial gain or fraudulent inducement.

The central question was whether these activities were illegal under India’s Prize Chits and Money Circulation Schemes (Banning) Act and the Odisha Protection of Interests of Depositors (OPID) Act. The Judge ruled that “Cryptocurrency is not money,” adding that “the investment made in cryptocurrency by the public can’t be considered a deposit within the meaning of the OPID Act.”

As a result, the ruling concluded:

"Mere dealing in cryptocurrency cannot be treated as illegal in any manner. Hence, it cannot be considered an offence under the OPID Act."

Justice Mishra explained that the scheme operated on a “person to platform” basis, stating:

“The methodology adopted being person to platform, it cannot be said that the accused had cheated any person, particularly given that any amount invested by any person remains secure in his or her trust wallet."

While there are no solid regulations, the nation considers cryptocurrencies as ‘Virtual Digital Assets.’ Digital assets cannot be used as legal tender within the jurisdiction but are subject to tax obligations.