Delhi court notice to CERT, crypto platform on plea seeking ban on futures trading in cryptocurrencies

A Delhi court recently issued notice to a crypto trading platform in a plea seeking a ban on derivatives-trading in cryptocurrencies conducted by a Caribbean-based firm named Saledo Global LLC [Vidyut Kayarkar v Saledo Global LLC and Ors]..Notice was issued by the Additional District Judge, South-East District, Saket Court, directing the respondent company, Saledo Global LLC to file its response by February 24.The Court also sought response from Computer Emergency Response Team (CERT) which comes under the Ministry of Electronics and Information Technology..The plea, filed by a man named Vidyut Kayarkar through advocate Nipun Saxena, said that he had carried out various transactions for different cryptocurrencies on the firm's website only to realise later that the trading was based on speculation, that is on the increase of price or value of the cryptocurrency over a short window of time and no actual delivery of cryptocurrencies was made which amounts to wagering.Saxena informed the Court that though trading in derivatives is per se legal in India, it has to be carried out on a recognised stock exchange or a recognised market association, by an entity which is registered and incorporated in India. There has to an actual physical delivery of goods which is not the case with the defendant, he added. “The business operations of the Defendant No. 1 Company demonstrate that there is no actual delivery of cryptocurrencies. There is speculative trading being carried out on the futuristic value of crypto currencies over a very short period of time,” the Court was told..It was submitted that SEBI has provided a list of 9 recognised stock exchanges/market associations which have been registered/incorporated in India, and only these have been conferred with the right to carry out derivatives-trading in security, currencies or a commodity. The respondent-company does not fall under this list, it was pointed out. “Defendant No. 1 does not fall within the list of any of the 9 recognized stock exchanges/market associations which are licensed to operate in India and as per its own admission, the Defendant No. 1 does not even have any office in India, and yet it continues to offer services in derivative trading of cryptocurrencies which is illegal and prohibited in law,” Saxena told the Court..The plea, therefore, sought a declaration that forward-contracting of cryptocurrencies without any physical delivery is tantamount to wagering which is void under Section 30 of Indian Contract Act. A decree of permanent injunction has also been sought to Airtel, CERT India and other internet service providers to block access to the firm’s website in India.