A CRITICAL LEGAL STUDY RELATING TO THE PLAUSIBILITY OF A REGULATORY FRAMEWORK ON CRYPTOCURRENCY IN SRI LANKA

Abstract

Incredible innovations come with huge opportunities for the then existing practices and also with potential risks associated with them. Cryptocurrency is not an exception to this. Crypto is a constantly evolving topic and has gained momentum in both national and international forums. Having introduced ten years ago, the lack of unanimity in regulating and defining the crypto and associated mining process and the dilemma in associated jargon has created the lawmakers to have only three options available and they are to completely ban, regulate the mechanism, or completely ignore it and let the cryptocurrency to float on the hands of the owners. This paper intends to analyze the current legal positions in India and the European Union in regulating Virtual Currencies. It is an undisputable fact how the opportunity is exploited by the abusers to engage in illicit purposes in the absence of an effective legislative mechanism. The paper engages in justifying the necessity of a regulatory mechanism, which will be conducive to the thriving of the economy of the country amidst an economic crisis. The paper employs a black letter approach and an international and comparative one where the decided case laws and legislations are used as primary sources, and the scholarly articles and journal articles constitute secondary sources. The paper suggests that a complete ban will not be a panacea but a regulation to a certain extent is mandatory rather than ignoring the topic from the eyes of the legislature.