The popularity of cryptocurrency as led to frauds and scams. At least eight cases of cryptocurrency-related frauds are already under investigation by the Directorate of Enforcement, the Ministry of Finance said in a reply to the Parliament.
The Reserve Bank of India has repeatedly warned those holding and trading in digital currencies that such activities possess economic, financial, operational, legal, customer protection and security risks. The central bank has been against the wider adoption of cryptocurrencies in India. Cases like those under investigation highlight why the central bank and the government want to regulate and control private virtual currencies.
“The government does not collect data on digital currencies. However, eight cases concerning cryptocurrency-related fraud are under investigation by the Directorate of Enforcement. Further, a case has also been registered by the Bangalore Zonal Unit of the Directorate of Enforcement in respect of Bitcoin. The disclosure of information of these cases will not be in the larger public interest," the ministry said in a reply to a question in Parliament.
The government is currently preparing to table a bill on Cryptocurrency and Regulation of Official Digital Currency, for regulation of cryptocurrencies. The bill will create the framework necessary for the RBI to introduce a CBDC, while also banning all private virtual currencies. The bill would also allow the government to promote the underlying technology of cryptocurrency and its uses in certain exempt cases.
“The earlier attempt was definitely to come up with a Bill that the house can consider. But, later, because rapidly a lot of things had to come into play, we had started working on a new Bill. This is the Bill that is now being proposed,” said Finance Minister Nirmala Sitharaman.
(Edited by : Thomas Abraham)
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