010- Apr 5 Crypto Dilemma: WazirX Hack & The Legal Grey Zone in India
Economy, GS3, Cybersecurity & Digital Assets
By IAS Monk / April 5, 2025
🔍 What Sparked This?
A major crypto exchange, WazirX, faced a serious hack. Investors lost money—and took their case to India’s top consumer court, the NCDRC. The court dismissed it, exposing India’s fragile legal ground for crypto.
⚖️ NCDRC Verdict – Key Observations
| Legal Standpoint | Details |
|---|---|
| Legal Tender? | ❌ Crypto isn’t legal currency in India |
| Jurisdiction? | ❌ Indian consumer courts can’t decide disputes under WazirX’s Singapore-based terms |
| Cybercrime Scope | ❌ Beyond consumer court’s capacity |
| Legislative Gap | âś… Parliament or Supreme Court must step in |
| Regulation Status | ❌ RBI has not recognised or regulated crypto exchanges like WazirX |
| AML Considerations | âś… PMLA could apply if financial crime is evident |
đź“ś Where Does Indian Law Stand on Crypto?
- ❌ Not legal tender — Cannot be used to buy goods officially.
- ❗ Not banned either — Exists in a grey zone.
- 🏛️ 2018 RBI Ban — Overturned by Supreme Court in 2020 (violated Article 19(1)(g)).
- 💰 Taxation in place — VDAs taxed at 30% since April 2022.
- 🧑‍⚖️ Consumer Rights — NCDRC says crypto may be “goods,” but legal protections unclear.
- 🪙 No special legislation — Parliament has not yet passed a regulatory law.
đź“š Timeline of Crypto Regulation in India
| Year | Milestone |
|---|---|
| 2018 | RBI bans banks from crypto dealings |
| 2020 | Supreme Court overturns ban |
| 2021 | Crypto Regulation Bill proposed (not passed) |
| 2022 | Crypto taxed under Income Tax Act |
| 2025 | NCDRC dismisses WazirX investor plea |
🚨 Why It Matters
Without a legal framework:
- Indian investors remain unprotected.
- Exchanges operate without oversight.
- Court interventions remain ambiguous.
- Crypto’s future in India depends on legislative clarity.
✨ Closing Whisper
“In a land without rules for coins of code,
Justice searched, but found no node.”
🔥 A Thought Spark – by IAS Monk
Law must not lag behind innovation.
In digital realms, ambiguity invites chaos—clarity is the new currency.
