India’s Supreme Court has questioned the government’s lack of regulatory clarity on cryptocurrencies despite imposing taxes on digital assets like Bitcoin.

According to Indian legal news outlet LawChakra, the country’s Supreme Court expressed concern over the growing use of Bitcoin (BTC) and other cryptocurrencies while remaining largely unregulated.

“This is a whole parallel economy running with such coins and is a danger to the economy of the country,” Justice Surya Kant reportedly said during a recent hearing related to an ongoing investigation into a Bitcoin transaction.

Kant further highlighted that while the government has implemented crypto taxation, it has failed to regulate the space.

“If you can tax it at 30%, also please regulate it as you have recognised it by taxing it,” the judge said.

Related: Indian high court orders steps to block Proton Mail

Government says review may follow

The Additional Solicitor General of India — a senior legal officer representing the government of India — reportedly answered the request by saying that the government “will take instructions, my lord,” indicating that the government may consider reviewing the country’s current cryptocurrency regulation.

The report follows a May 5 hearing by the Supreme Court of India during which Kant and lawyer Mahesh Jethmalani shared their views on cryptocurrency. Jethmalani explained that Bitcoin is already seeing widespread usage worldwide, noting that “in Europe, you can walk into a car showroom and buy a car using just one Bitcoin.”

Related: Coinbase plans India comeback with FIU registration

While this scenario is not as common as this statement may suggest, buying a car with Bitcoin is possible at specialized sellers. The lawyer also showed that he misunderstood the pseudonymous nature of Bitcoin’s creator, Satoshi Nakamoto, claiming that he was from Japan:

“It was created by someone from Japan who used a fake name.”

Concerns over misuse

Kant also expressed concern over the misuse of cryptocurrencies during the hearing. He said that “there is some system of rules that applies to this.”

Kant also said that “some Bitcoins are genuine, but some might not be.” However, it’s unclear whether he meant to suggest that counterfeit Bitcoin are in circulation (there are none) or that illegal activities taint some.

The latter appears likely since the statement was followed by the judge saying that “it has also become a possible way to do illegal business.”

India’s government has not yet introduced comprehensive legislation to govern cryptocurrencies, though it taxes gains and requires firms to report certain activities to financial regulators. The lack of regulation has drawn criticism from both the industry and policymakers amid the asset class’s continued growth.

Magazine: India mulls new crypto ban to support CBDC, Lazarus Group strikes again: Asia Express

Bitcoin developer Ben Allen has received a $100,000 grant from investment firm Maelstrom to support the development of Payjoin, a privacy-focused tool aimed at improving Bitcoin’s scalability and privacy.

According to a May 20 announcement shared with Cointelegraph, Maelstrom will finance Allen’s work on his Payjoin devkit alongside Dan Gould. The system allows Bitcoin (BTC) senders and receivers to use batched transactions, with positive implications for scalability and privacy.

Payjoin Developer Kit’s website. Source: Payjoin Dev Kit

Payjoin was first proposed by Nicolas Dorier in 2019 in Bitcoin improvement proposal (BIP) 78. The core principle behind the system is that both senders and receivers may contribute inputs to a transaction.

“Namely that privacy is enhanced and improved consolidation of transaction outputs is achieved, benefiting scalability,“ the Maelstrom announcement states.

A Maelstrom representative told Cointelegraph that grantees are paid monthly for a total of $100,000 per year in Bitcoin and Allen’s grant will last one year. There are no concrete milestones and the grant is managed on a hands-off approach:

“We believe grantees may work better with freedom to work on what they wish, rather than being tightly controlled by those who provide the funding.“

Related: Bitcoin privacy will survive despite CoinJoin closure — zkSNACKs CEO

Payjoin: Soon in wallets near you?

Allen will be working on improving Payjoin implementations, with the clear objective of making it possible for the feature to be added to more wallets. He explained that the funding will enable him to work on the project full time.

The announcement points out that the system presents challenges, with the receiver needing to be online and the payment communication flow being more complex than normal non-interactive Bitcoin transactions. Maelstrom’s chief investment officer and BitMEX crypto exchange co-founder and former CEO Arthur Hayes said that “improving financial privacy in Bitcoin is extremely important.” He added:

“The great thing about Payjoin is that if only a small amount of adoption is achieved, it breaks a key assumption used by financial surveillance companies. The assumption they have is that if a Bitcoin transaction has multiple inputs, all the inputs must all belong to the same entity.“

A Maelstrom representative explained to Cointelegraph that the firm “is keen to support more grantees in the privacy area.” The company is actively seeking candidates with strong track records in Bitcoin privacy projects.

Related: What are privacy coins and how do they differ from Bitcoin?

Enjoy the benefits whether you use it or not

Hayes noted that “Payjoin adoption improves the privacy of even the people who don’t use it.” Allen said he believes privacy is important for Bitcoin users to enjoy a better experience and control their financial data when using it daily.

Allen told Cointelegraph he is “building out benchmarks to help downstream developers implement Payjoin in individual wallet software as well as expanding test coverage to ensure consistent and reproducible code.” He explained that encouraging its adoption “is the biggest step we can take for simplifying the experience and encouraging Payjoin adoption by moving the complexities mostly away from the user.”

The Maelstrom representative told Cointelegraph that “a key metric for Payjoin success would be adoption by popular open source Bitcoin wallets.” “In particular if the BitcoinCore wallet ever adopts it, that would be a huge signal of success,” they added.

Magazine: Big Questions: What did Satoshi Nakamoto think about ZK-proofs?

Binance has filed a motion to dismiss a $1.76 billion lawsuit brought by the FTX estate, accusing the defunct crypto exchange of trying to deflect blame for its own failure.

Filed on May 16 in the Delaware Bankruptcy Court, Binance’s legal team called the suit “legally deficient,” stating that FTX’s collapse was not triggered by market manipulation or hostile action but by internal misconduct.

“Plaintiffs are pretending that FTX did not collapse as the result of one of the most massive corporate frauds in history,” the filing said, pointing to Sam “SBF” Bankman-Fried’s conviction on seven counts of fraud and conspiracy.

FTX’s estate alleges that Binance received billions in crypto during a 2021 buyback deal, funded improperly with customer assets.

Binance rejects this claim, stating that “FTX remained a going concern for 16 months” after the share repurchase and that there was “no plausible claim” the exchange was insolvent at the time.

Binance filing to dismiss FTX’s lawsuit against the exchange. Source: Law360news

Related: Binance wants arbitration for all members of securities class suit

Zhao’s tweet and FTT crash

The lawsuit also accuses former Binance CEO Changpeng Zhao of triggering a collapse through a tweet on Nov. 6, 2022 announcing the liquidation of FTT tokens.

In response, Binance argued that Zhao’s tweet was based on publicly known concerns. “Binance’s decision to liquidate its remaining FTT was, in fact, ‘due to recent revelations ’— in particular, the Nov. 2, 2022, CoinDesk article” that exposed Alameda Research’s balance sheet.

The company further defended Zhao’s comment that Binance would aim to minimize market impact. “The Complaint contains no such facts” to prove Binance had no intention of following through.

CZ announced plans to liquidate FTT holdings in 2022. Source: CZ

In challenging the court’s jurisdiction, Binance said none of the foreign entities named “are incorporated in or maintain their principal place of business in the United States,” and thus fall outside the court’s reach.

The filing also criticizes the plaintiff’s narrative as “a grab bag of state law claims” based on “pure conjecture — much of it sourced from a convicted fraudster’s hindsight speculation.”

Binance has asked the court to dismiss all claims with prejudice. The FTX estate has not yet filed its response.

Related: FTX EU creditors can now withdraw money from Backpack exchange

FTX to disburse $5 billion in second round of creditor repayments

FTX is set to begin its second round of repayments to creditors more than two years after filing for bankruptcy.

In a May 15 notice, the FTX Recovery Trust announced that over $5 billion will be distributed starting May 30 through BitGo and Kraken, targeting parties in the second eligible group under the exchange’s reorganization plan.

According to the plan, five creditor groups categorized as “convenience classes” are expected to receive between 54% and 120% of their claims. In total, FTX may repay up to $16 billion, depending on the final number of valid claims.

Magazine: Father-son team lists Africa’s XRP Healthcare on Canadian stock exchange