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The policy body that represents the interests of India's crypto industry is not planning to file a legal challenge against the Reserve Bank of India (RBI).
"We have no plans to file a contempt of court challenge," a spokesperson of the Internet and Mobile Association of India (IAMAI) told CoinDesk regarding Coinbase (COIN) CEO Brian Armstrong raising the idea of a legal move against the Reserve Bank of India (RBI).
Tough questions, and good questions, for NPCI and RBI in India. Is their "shadow ban" a violation of the supreme court ruling?https://t.co/59tbDH1zLS
— Brian Armstrong - barmstrong.eth (@brian_armstrong) April 25, 2022
The Coinbase CEO sowed the seed of a Supreme Court challenge by tweeting to ask if the RBI's "shadow ban" – in which payment processors cut off local crypto exchanges – was a violation of a 2020 Supreme Court ruling. His tweet came following his company's ill-fated India launch, which led to Coinbase exiting the country days later. Armstrong later pointed to "informal pressure" from the RBI as reason for the exit.
"I would not like to comment on speculative observations made by individuals outside," RBI Governor Shaktikanta Das later said in an interview with CNBC TV 18.
Beginning in 2018, the RBI had effectively banned banks through a notification from supporting or engaging in crypto transactions. The Supreme Court, however, overturned that rule early in 2020.
Procedurally, legal sources say a contempt of court challenge is technically best filed by the original petitioner in the Supreme Court, which in this case would be the IAMAI. If it is not the original petitioner, then an individual entity seeking to file a contempt of court is required to first prove how it is an aggrieved party to the case. This itself is a tricky procedural hurdle.
Sources have indicated divergent views regarding the IAMAI's position. While no difference of opinion exists between major players on the collective decision of the IAMAI to avoid a legal battle against the RBI, there are less-influential players who believe a legal challenge is the best way forward.
At least one person has indicated that, legally, all the ducks are in a row to file a contempt of court challenge – which includes funding and legal process approvals – but, for now, the industry body (IAMAI) is unequivocally against the idea.