The Supreme Court on Monday expressed concern over the lack of regulatory oversight for cryptocurrency in India, while underscoring that an outright ban may not be economically prudent.

A Bench comprising Justice Surya Kant and Justice NK Singh remarked that although the Court does not advocate a complete prohibition on cryptocurrency, there is a pressing need for structured regulation and expert-led oversight.

“We are not suggesting a blanket ban. That might not be wise for the economy. But what about regulating it?” Justice Kant asked, emphasizing that emerging international trade mechanisms make it essential for India to stay engaged with the global reality of crypto assets.

Recalling a similar observation made nearly two years ago in a different matter, Justice Kant noted that the then Attorney General had expressed the government’s hesitation, citing the international nature of the crypto market. However, the Court pointed out that such reasoning should not be a roadblock to establishing a regulatory framework.

"Banning may be like shutting your eyes to ground reality. We are not experts — experts should examine this — but some steps are needed to regulate and monitor it," the Bench observed.

The Court also highlighted that taxing profits from Bitcoin trading at 30 per cent amounts to a form of legal acknowledgment. “If it is already being taxed, then why not regulate it?” the Bench queried.

Justice Kant further pointed to the practical difficulties courts face when adjudicating cryptocurrency-related cases. “Tomorrow, somebody will ask me to prove — what is the asset? How do we prove it?” he remarked, highlighting the evidentiary challenges posed by digital assets.

Additional Solicitor General (ASG) Aishwarya Bhati, appearing for the Centre, assured the Court that she would seek instructions from the government on its stance and the timeline for crypto regulation.

The observations were made during the hearing of a case involving alleged cryptocurrency fraud across multiple States. The petitioner in the case is accused of abducting two employees of the now-defunct cryptocurrency platform M/s. BitConnect Ltd. in early 2018, and extorting 2,091 Bitcoins, 11,000 Litecoins, and ₹14.5 crore in cash to recover his investment losses.

During the hearing, the Court sought clarity on the timeline for completing the investigation into the petitioner’s alleged offences. ASG Bhati responded that an updated report on the probe, along with the Union government’s position on cryptocurrency regulation, would be submitted by July.

The Bench made it clear that while broader policy issues could be addressed separately, the immediate focus must be on determining the role of the petitioner in the case. “We have to deal first of all with this gentleman, because right now it is difficult to understand from the file whether he is a victim or the victimizer," the Court said.

The matter has been listed for further hearing on May 30, with directions to the Central Bureau of Investigation (CBI) to make all efforts to complete the ongoing investigation by that date.

Senior Advocate Siddhartha Dave, along with Advocates Mohit D Ram, Rajul Shrivastav, and Kishan Dhaiya, appeared for the petitioner.