On 4 March 2020 a three-judge bench of the Supreme Court of India set aside the RBI's April 2018 circular that had cut crypto businesses off from the banking system. The case was Internet and Mobile Association of India v. Reserve Bank of India, and the judgment was written by Justice V. Ramasubramanian. The Court agreed the RBI has the power to act in this area, but held that this particular ban was disproportionate.
In plain words: the RBI was allowed to worry about crypto, but it was not allowed to shut an entire lawful activity out of the banks without showing real harm and without trying something less drastic first. The judgment did not turn Bitcoin into money under Indian law and it did not create a rulebook for exchanges. It reopened the banking door. I was on the inside of that fight as a co-founder of Unocoin, so here is the case the way I lived it, with the record next to my memories.
The circular that started it
On 6 April 2018 the RBI issued a circular titled "Prohibition on dealing in Virtual Currencies (VCs)", reference RBI/2017-18/154. It told every entity the RBI regulates, which means banks and payment companies, that they "shall not deal in VCs" or provide services to anyone dealing in them. Those already serving crypto businesses had to "exit the relationship within three months".
For an exchange, a bank account is oxygen. Customers send rupees in, they take rupees out. Take away the bank and you have a website with no plumbing.
The RBI had been nervous about crypto for years before that. It had issued cautionary press notes since 2013. I remember the first one landing roughly two weeks after we launched Unocoin, and I remember thinking we had walked straight into a wall. But a caution is not a ban. In 2018 there was still no law passed by Parliament banning virtual currencies. The circular was the RBI acting on its own.
What 2018 felt like from inside an exchange
We had to lay off about a hundred people just to survive. There were tears everywhere. Good people, people who had believed in what we were building, walking out of the office because the banks had been told to stop talking to us.
Some companies left India. We stayed. From day one our philosophy was that you cannot run from the government. They exist, and you have to deal with them. Never break the rules, never be offside. So instead of moving offshore, we kept the doors open as best we could and joined the challenge in court.
I want to be precise about Unocoin's role, because I have seen it exaggerated. Unocoin was part of the case that challenged the ban. We were not the only party, and I will not pretend we carried it alone.
Who went to court
Two writ petitions were heard together. W.P.(C) No. 528 of 2018 was filed by the Internet and Mobile Association of India, an industry body. W.P.(C) No. 373 of 2018 was filed by crypto exchange operators, shareholders, founders and traders. The case is usually cited as Internet and Mobile Association of India v. Reserve Bank of India, 2020 SCC OnLine SC 275.
The case took nearly two years. During that time Unocoin was making very little money, and I was lucky to have work elsewhere. Kraken's founder offered me a job, and I became Kraken's first head of global business development while the case ground on in Delhi.
What the judges asked
Here is the moment I still think about. Near the end, the judges did not just want to hear from companies and associations. They wanted to see a real person whose rights had been affected by the circular. And Unocoin's own business was put under the microscope. How did we do KYC? Where did the money flow? What did we actually do all day?
That scrutiny is the reason I tell every founder in this industry to keep their records clean. When the highest court in the country asks you to explain yourself, you either have the paperwork or you do not.
Honestly, I would have bet we would lose. A small Bitcoin company against the people who print money in the most populous country on earth. That is not a fight you expect to win.
The holding: power yes, proportionality no
The judgment has two halves, and you need both to understand it.
First, the Court accepted that the RBI does have the power to regulate in this area. Crypto touches payment systems, and the RBI's job includes protecting them. The industry did not win the argument that the RBI had no say.
Second, the Court asked whether this specific measure was proportionate, and it said no. The RBI had not shown that any of the banks and other entities it regulates had suffered a loss from dealing with crypto exchanges. And there were less intrusive options available than cutting off an entire sector. A blanket ban, with no demonstrated damage and no attempt at a lighter tool, went too far. So the circular was set aside.
All three judges ruled in our favour. I remember the feeling more than the words. After two years of layoffs and silence, the door was open again.
What the judgment did not do
This is where most explainers go wrong, so let me be blunt.
- It did not make Bitcoin or any crypto money under Indian law.
- It did not create a regulatory framework for exchanges, or any investor protection scheme.
- It did not say crypto is safe, approved or endorsed by anyone.
- It did not take away the RBI's power to act again with a better-reasoned measure.
What it did was simpler. It removed a banking ban that the Court found disproportionate. Buying, holding and selling Bitcoin in India is not banned. It is taxed, it is unregulated as an asset, and platforms must register with FIU-IND under anti-money-laundering law. Those later rules came from Parliament and the Finance Ministry, not from this judgment.
The 2021 follow-up most people missed
Even after the judgment, some banks kept quoting the 2018 circular to customers. So on 31 May 2021 the RBI issued another circular, RBI/2021-22/45, on customer due diligence for virtual currency transactions. It told banks that references to the 2018 circular were "not in order" because it had been set aside and could not be cited. It also reminded them that normal KYC, anti-money-laundering, PMLA and FEMA checks continue.
That second half matters for you. The judgment did not mean anything goes. It meant crypto businesses get treated like any other customer of a bank, with the same checks.
What happened after
Things moved fast once the door opened. Unocoin's Series A, led by Draper Associates, was reported in October 2020. The Drapers have a nickname for us: cockroaches, because we are never going to die. I take it as a compliment.
Then the state built the framework that the judgment had left empty. The Finance Act 2022 brought the 30% tax on VDA income under section 115BBH and the 1% TDS under section 194S. In March 2023 crypto activities were brought under the Prevention of Money Laundering Act, so platforms now register with FIU-IND as reporting entities. Unocoin is registered with FIU-IND as a reporting entity under the PMLA.
Why it still matters in 2026
Every year someone asks me whether India will ban crypto again. The honest answer is that the 2020 judgment does not make that impossible. The Court said the RBI has power here. What the judgment did was set a standard: a measure that cuts off a lawful activity has to be proportionate, and it has to rest on evidence of harm.
The debate today is happening in Parliament's committees, in the RBI's submissions and in the tax rules, which is where it belongs. In July 2026 the RBI told the Parliamentary Standing Committee on Finance that VDAs should not be legalised. That is a view, not a law. The rules you live by today are still the ones above: taxed, unregulated as an asset, KYC and FIU-IND registration for platforms.
For me, the lesson of the case is the one I learned in 2013. You cannot run from the government. You show up, you keep your records, you explain yourself, and sometimes the system surprises you. Thirteen years later Unocoin is still here.
If you want the full timeline with every document linked, from the 2013 caution notices to the 2021 circular, read the Supreme Court story. And if you are deciding which platform to trust today, start with the checks anyone can run.
Common questions
What did the Supreme Court decide on crypto in 2020?
On 4 March 2020 the Supreme Court set aside the RBI's 6 April 2018 circular that barred banks and other RBI-regulated entities from serving crypto businesses. It accepted that the RBI has power to regulate in this area but found the ban disproportionate, because no regulated entity had been shown to suffer loss and less intrusive options existed.
Who filed the case against the RBI?
Two writ petitions were heard together: W.P.(C) 528 of 2018 by the Internet and Mobile Association of India, and W.P.(C) 373 of 2018 by crypto exchange operators, shareholders, founders and traders. Unocoin was part of the case that challenged the ban.
Did the Supreme Court legalise Bitcoin?
No. The judgment removed a banking ban. It did not make crypto money under Indian law, did not create a regulatory framework and did not endorse crypto. Buying and holding Bitcoin is not banned; it is taxed, unregulated as an asset, and platforms must register with FIU-IND.
What is the IAMAI vs RBI case?
It is the common name for Internet and Mobile Association of India v. Reserve Bank of India, 2020 SCC OnLine SC 275, decided by a three-judge bench with the judgment written by Justice V. Ramasubramanian.