Following a bitcoin exchange operator’s petition, the High Court of Delhi has sent out a notice to the Reserve Bank of India (RBI) for its order prohibiting banks from engaging with cryptocurrency services.
The company, Kali Digital Ecosystems, had plans to launch their exchange platform CoinRecoil in August this year.
The company filed the petition last week, in pursuit of “an appropriate writ, order or direction quashing the circular,” saying the central bank’s ban is not only arbitrary but also unconstitutional. The company also claims they are unable to start operations due to the RBI’s restrictions on banking services.
Kali Digital Ecosystems included the Indian government in their petition as well. According to a statement from the firm, the Ministry of Finance and others are included in the petition as well.
The notice that was served to the RBI acknowledges the company’s petition to the high court. The next hearing over the case is set on May 24.
Rashmi Deshpande from the Khaitan & Co. law firm was quoted to have said:
“The move by the RBI has put the burgeoning cryptocurrency sector in jeopardy and may affect the basic rights of such entities to carry on any trade.”
The RBI stated in its circular that financial institutions and banks under its authority will cease all deals with cryptocurrency exchanges and other services related to it.
In November last year, the Indian Supreme Court requested the government to respond to a petition to shed light on the matter.
The RBI raised warnings against cryptocurrencies in 2013 and 2017 advising “users, holders and traders” that they did not license any company in India to work with cryptocurrencies.