Letter from the Judges:

Greetings from the bench,

Participants, you have been given an opportunity to partake in this simulation of
trial and arbitration in the apex court of our country. The supreme court is the
highest authority that upholds and enforces our constitution, it is the soul of our
democracy without which the social fabric of our republic would fall apart, and all
the other organs of the state in all their might and power would crumble.

The judgments of this court set precedent binding on all citizens and subordinate
magistrates, hence, realize the power you’re being given as officers of the court.
The cases presented to you are monumental in their impact and extremely
intricate in nature. So we expect you to bring your A game

As your judges, our expectations are crystal clear, present logical and factual
arguments supported by the law that further your interests. Your speeches and
briefs must be rational in nature with no room for emotional arguments or
conjecture. Behave with professionalism, in good faith and maintain decorum in
the courtroom.

With that being said, good luck.

Introduction

The 21st century has seen the rise of novel technologies that have revolutionized
fintech and the global economy. As you must have guessed, we are indeed
referring to cryptocurrencies, however all the changes that crypto has brought to
the world is irrelevant, our focus is on the legal challenges it poses in the Indian
context. Cryptocurrencies are extra-constitutional currencies that do not
constitute legal tender and exist outside the state machinery.

This is the essence of the arguments against it, and is echoed by most
governmental financial regulatory bodies around the world.
The case in concern is the case of Internet and Mobile Association of India v.
Reserve Bank of India, with special reference to the circular [currently
impugned] issued by the Reserve Bank of India. The circular issued, tends to put
a ban on the trading of virtual currencies also known as crypto currencies. The
circular directs the bank to not to deal with the transactions involving the trade of
virtual currencies.

Reserve Bank of India (RBI) issued a circular dated 6th april,2018. The circular
prohibits the bank and other entities too from trading in virtual currencies.
Moreover the circular barred the banks from providing any kind of services to
any individual or entity dealing or setting virtual currencies. The prohibition
issued by the Reserve Bank of India had a negative effect on the Indian economy
as the mediums (the bank accounts), through which virtual currencies were
traded could no longer be maintained or operated therefore an end to the
business through virtual currencies did prevail.

In reference to the same, at the time of issuance of the circular by Reserve Bank
of India there was no legislation passed imposing a ban on the trade of virtual
currencies. In other words the virtual currency was separated from the assets of
the economy. The reason why the Reserve Bank of India issued the circular was
their concern which was related to the hacking of virtual currencies.

Background

The Reserve Bank of India had issued a circular dated 6th April, 2018, stating
that banks and other entities were barred from trading in virtual currencies.
Basically any services or transactions pertaining to crypto currencies was not
permitted. This had a huge negative impact on the Indian economy.

As a result, bank accounts used for transactions of virtual currencies became

unfeasible and unoperational.

The Reserve Bank of India stated the reasons for the blanket ban of virtual
currencies as follows :

a) money laundering
b) loss of the economy, and
 c) promotion of terrorist activities

These being due to the concern of crypto currencies endangered to hacking.

Before issuing the circular, the Reserve Bank of India conducted a press release
to inform the banks and entities of the dangers of virtual currencies. It has been
releasing such cautions to heedfully invest in crypto currencies, back from 2013
onwards. After five years, that is in 2018, the Reserve Bank of India finally
decided on banning such currencies due to the aforementioned reasons.

The main issue to emerge was that though the Reserve Bank of India has been
warning us of the misuse of virtual currencies, it has been doing so since 2013
and no new rationale has emerged for the bank to abruptly initiate a ban, making
it illogical and incoherent.

Facts of the case

● On 5th April, 2018 Reserve Bank of India issued a press release raising the
concern about the consumer protection from trade of virtual currency.
They were of the view that trading in virtual currency also referred as
crypto currencies are prone to hacking and therefore would lead to money
laundering, terrorist activities, etc. In this view RBI asked the banks to not
to deal with the transactions related to the trading of virtual currency.

● The services which RBI directed the bank not to deal with were-
maintaining the accounts, registering, trading, settling, clearing, giving
loans against virtual currencies, accepting virtual currency as collateral,
opening accounts of exchanges dealing with them and transfer or
sale/purchase of virtual currencies.

● The matter was challenged by the Internet and Mobile Association of India.
The Supreme court of India allowed the petition on the ground of
proportionality. Earlier in 2013 the Reserve Bank of India did issue a
public caution to the traders and holders of virtual currency in context with
the legal and security related risks associated with it.
Issues / Contentions

Petitioners :

The petitioner, Internet and Mobile Association of India, contended that the
Reserve Bank of India never even possessed the jurisdiction to disallow the trade
of crypto currencies and hence the blanket ban was disproportionate, violating
the fundamental right of trade.

The petitioner also stated that virtual currencies are not a kind of legal tender but
merely a medium of exchange or a store of value and the Reserve Bank of India
could only regulate legal tender.

To clear things out, legal tender is a form of money that courts of law are required
to recognize as satisfactory payment for any monetary debt. This is also known as
fiat money.

In recent times, crypto currencies are also becoming a part of fiat money.
However, in India virtual currencies still do not hold the status of legal tender,
hence depriving the Reserve Bank of India of any jurisdiction to regulate crypto
currencies.

The petitioner further mentioned that even if it accepted the Reserve Bank of
India for having any right to regulate the virtual currencies, the way it had
initiated the blanket ban seemed to be malicious in nature and against article 19
1(g) of the Indian Constitution.

Article 19 1(g) provides the fundamental right to practice any profession,

occupation or carry on any business.

Hence the circular violates this fundamental right and goes against the test of
reasonableness (which assesses a dispute through the eyes of a reasonable
person) and the test of proportionality (in which courts quash the discretionary
powers or any discriminating administrative action.

Respondents :
The respondents argued back stating that it had the legal jurisdiction to impose a
ban and that though the fundamental right through article 19 1(g) is available, the
Reserve Bank of India can impose reasonable restrictions to protect the larger
interest of the public and that these restrictions are pre-emptive measures of
protections.

The Reserve Bank of India also stated that some institutes do consider crypto
currencies as valid payment making it a legal tender, hence giving the Reserve
Bank of India the necessary jurisdiction to initiate a blanket ban.

What we expect

The task allocated to the petitioner as well as the defendant is to draft briefs
containing your legal arguments.
As the petitioner you have to overturn the RBIs blanket ban, and disprove the
arguments presented by them while simultaneously exhibiting how the ban is
outside their jurisdiction. Your arguments however don't have to be limited by
these parameters and you can go above and beyond the enumerated arguments

As the defendant you have to stand by the legitimacy of your actions.

Do not repeat the past, refrain from plagiarizing arguments. We encourage

original thinking. To influence the judgment given by this court is completely in
your power.

The format of the brief is as follows:

1. The brief must be at least over 1000 words. There is no upper limit on the
length of your brief and can be made as long as possible, provided there is
no unnecessary repetition and/or redundant arguments
2. Times new roman- Font, Size 12
3. How you want to structure your arguments is upto your discretion
4. Use of pictures, PPTs and spreadsheets is allowed

Conclusion :

It's time for the participants to get their feet wet and begin with the case.
Use the aforesaid information given as resourceful material to comprehend the
case. You have been given a time limit of 45 minutes to prepare the briefs and
revert it to us. Both the petitioner and defendant will be given an opportunity of
explanation of their respective briefs for 2-5 minutes. The time crunch is real!

We wish you nothing but the best of luck on your journey.

May the best team win!