An Indian cryptocurrency trading company has filed a complaint challenging the central bank's ban on the country's commercial banks from providing services to investors in digital currencies.
Maharashtra-based Flintstone Technologies Pvt. Ltd filed a writ petition in the High Court of Delhi seeking the withdrawal of a circular issued by the Reserve Bank of India (RBI) last month, which it describes as "arbitrary, unfair and unconstitutional."
The company, which claims to provide an online crypto-currency digital wallet service for Bitcoin and Money trade coin, has contended that the RBI has not explained any reason for imposing the restrictions.
Firms or individuals in India can no longer avail the services of the country's banks, e-wallets, and payment gateway providers to purchase and sell cryptocurrencies after the Reserve Bank on April 6 slapped a ban on banks providing services to investors in digital currencies.
In its monetary policy review, the Reserve Bank Deputy Governor Bibhu Prasad Kanungo had said the decision was taken in view of "the associated risks." The central bank asked banks already providing such services to cryptocurrency investors to stop them within three months.
The petition was filed by Flinstone Technologies Director Amit Lakhanpal, who claimed that the RBI circular has made trading in virtual currencies impossible and is spreading panic among investors.
The petitioner has also urged the High Court to issue notices to the Ministry of Finance and the Goods and Services Tax Council (GST Council)
A single judge bench of Justice Rajiv Shakdher has scheduled the petition for hearing on May 24 to consider it along with a similar petition filed by Kali Digital Ecosystems Pvt. Ltd.
In its writ petition filed last month, the Ahmedabad-based startup company had argued that it had planned to launch a cryptocurrency exchange platform named CoinRecoil in August, for which substantial investment had been made. However, "the business of the Petitioner is stillborn on account of the impugned circular," the petition says, referring to the restrictions on banking services to Indian cryptocurrency purchase/exchanges.
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