Virtual Digital Assets And Shareholder Protection: Re-Reading Rights And Liability Under Indian Company Law
Santhosh M, The Central Law College, Salem, Tamil Nadu, India
CHAPTER 1
INTRODUCTION
Barely a decade ago cryptocurrency was a fringe experiment in peer-to-peer computing; today it sits on the balance sheets of retail investors, corporate treasuries, and a handful of listed companies. India's regulatory posture toward this shift has been guarded and, more than once, self-contradictory. The Reserve Bank of India's first serious attempt to keep virtual currencies out of the banking system came through a 2018 circular that directed regulated entities to stop servicing crypto exchanges a measure the Supreme Court ultimately struck down in Internet and Mobile Association of India v. Reserve Bank of India (2020).1 In the years since that judgment, Parliament has chosen neither to prohibit virtual digital assets outright nor to regulate them comprehensively, leaving the field to a patchwork of tax law, anti-money- laundering law, and general company-law doctrine none of it written with crypto assets in mind.
This paper narrows in on a question that sits inside that larger regulatory gap and has, so far, drawn comparatively little scholarly attention: what happens to the rights and liabilities of a shareholder once the company whose shares they hold begins to acquire, trade, mine, or otherwise deal in cryptocurrency? A shareholder's rights under the Companies Act, 2013 to receive information, to vote, to receive dividends, and to seek protection against oppression and mismanagement were designed for a company whose assets and liabilities could be captured in ordinary balance-sheet language. Cryptocurrency resists that language. Its volatility, its pseudonymity, and its distance from conventional custody and disclosure norms put pressure on each of these rights, and tracing that pressure is the central task of this paper.
