NCDRC Dismisses WazirX Case

April 5, 2025

The issue of cryptocurrency regulation in India has gained attention due to recent legal challenges faced by investors and exchanges. The National Consumer Disputes Redressal Commission (NCDRC) recently dismissed a plea from investors claiming losses from a major hack at WazirX, a prominent crypto exchange. This dismissal marks the ongoing ambiguity surrounding cryptocurrency’s legal status in India.

Court Verdict: What Did the NCDRC Say?

On April 3, 2025, the NCDRC dismissed the complaint, giving a 20-page explanation.
Key points from the decision:
- Cryptocurrencies are not legal tender in India.
- Since users agreed to WazirX’s terms (Singapore laws), Indian consumer courts don’t have jurisdiction.
- Consumer courts aren’t equipped to investigate cyberattacks of this scale.
- Only Parliament or higher courts can clarify whether Indian consumer courts can hear such crypto-related cases.
- The RBI has not yet regulated platforms like WazirX.
- The Prevention of Money Laundering Act could apply if financial crimes are proven.
- No comment was made about WazirX’s security measures or responsibilities.
- There’s a lack of clear Indian laws on cryptocurrency, making it hard for consumers to seek help.

Legal Status of Cryptocurrency in India

Not legal tender (cannot be used to officially buy/sell goods).
Not banned, but no special law allows or protects it either.
In 2018, RBI banned banks from dealing with crypto firms, but the Supreme Court overturned this in 2020, saying it violated Article 19(1)(g) (right to practice a profession).
Cryptos are now classified as Virtual Digital Assets (VDAs) under Income Tax laws and taxed at 30% since April 2022.
NCDRC admitted crypto may be “goods” under Consumer Protection Act, but its legal use is still unclear.
Parliament has not passed any law to regulate crypto.
RBI remains cautious, warning about crypto’s risks to the economy.
Crypto exchanges in India operate in a legal grey zone, with no dedicated authority to regulate or protect users.

Historical Context of Cryptocurrency Regulation

The Government of India has attempted to regulate cryptocurrencies but has not passed any definitive laws. The proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, aimed to ban private cryptocurrencies but has not been discussed in Parliament. The Supreme Court previously lifted a trading ban imposed by the Reserve Bank of India, emphasising the need for regulation.

Implications of the NCDRC’s Decision

The NCDRC’s ruling puts stress on the urgent need for a regulatory framework for cryptocurrencies in India. Without clear guidelines, investors remain vulnerable to risks associated with trading and investment in virtual currencies. The ruling also raises questions about consumer protection in the rapidly evolving digital asset landscape.

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