In a significant development, the Supreme Court of India has dismissed a writ petition seeking guidelines to prevent and penalize fraudulent cryptocurrency transactions. The bench, comprising Justices BR Gavai and AG Masih, ruled that such matters fall under the purview of the legislature and executive, and thus, cannot be addressed through judicial directions.

"That is in the domain of policymakers, how can we issue any such directions? We can't lay down the law," remarked Justice Gavai during the hearing.

The petitioners, who were investors and users of the cryptocurrency exchange WazirX, approached the Court after suffering losses allegedly caused by a cyberattack in July 2024. They claimed that over 230 million dollars were lost due to a security breach in a multi-signature wallet. The platform then reportedly decided to distribute the losses among all users, including those who had no involvement with the affected token, leading to widespread discontent.

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They argued that the lack of a regulatory framework for cryptocurrencies in India had deprived them of protection and redress, infringing their fundamental rights under Articles 14, 19(1)(g), and 21 of the Constitution.

“The Petitioners are also aggrieved by the inaction and failure of regulatory authorities... to intervene decisively and protect the interests of Indian investors in the cryptocurrency sector.”

Citing previous decisions like Internet and Mobile Association of India v. RBI, the petitioners emphasized that cryptocurrencies are treated as property under tax law, yet remain unregulated, leaving investors vulnerable. They urged the Court to issue guidelines similar to those laid down in Vishakha v. State of Rajasthan, which had addressed a legal vacuum in cases of sexual harassment.

However, the Court disagreed. Referring to a recent submission by the Solicitor General, Justice Gavai stated:

"About 2 weeks back, the Solicitor General argued that the Supreme Court and the High Courts cannot lay down guidelines in every matter!"

Although the petition was dismissed, the Court left the door open for further action, stating that the petitioners are free to make a representation to the appropriate government authority, which should be considered in accordance with the law.

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The petition, HAJARIMAL BATHRA AND ORS. vs UNION OF INDIA AND ORS. (W.P.(Crl.) No. 161/2025), highlighted broader concerns about the legal ambiguity surrounding digital asset transactions in India.

“There are no laws in India to protect the users or the investors or the entrepreneurs dealing with cryptocurrencies... There is no relief to customers in the event of collapse of unregulated exchanges,” the petition stated.

Advocates Anjali Anil, Radhika Prasad, and Maitreyi S. Hegde represented the petitioners, with Priyanka Prakash as the Advocate-on-Record.

The case brings to focus the urgent need for a comprehensive regulatory framework to govern the fast-evolving digital currency space in India.