Critical Analysis Of The Position Of Virtual Currency Under IBC

S. Hasthisha Desikan, Tamil Nadu National Law University

ABSTRACT

Virtual currencies (VC), particularly cryptocurrencies, have lately attracted a lot of investor attention in India. Even though there is currently no legislation governing their operation, the Indian VC sector is worth over $5 billion, with over 20 million active users. VC exchanges such as Coin DCX, Wazir X and others handle a substantial portion of VC transactions in India. These exchanges function as trading platforms, allowing investors to make new VC purchases using fiat currency (such as Indian Rupees) or use VC they already hold to the platform for buying and selling. The inadequacy of present laws to deal with VC, whether in terms of taxing, insolvency, or cybersecurity, deserves attention. The main obstacle to VC regulation is the lack of clarity about their nature, whether they are goods, commodities, currencies, or assets. The current legal regulation regarding VC in general is severely lacking and this issue is more concerning when it is viewed with respect to the online virtual currency exchanges as it is a multi-billion dollar market just in India and hence an ambiguity in the current legislations can result in adverse effects for the investors.