In India, cryptocurrency is currently unregulated and frauds related to it are treated as cybercrime. In the Lok Sabha, Shri Pankaj Chaudhary, Minister of State in the Ministry of Finance, recently clarified the government’s stance on this issue. He stated that due to the borderless nature of cryptocurrencies, any legislation for regulation or for banning can only be effective with significant international collaboration.

The government has previously reminded users, holders and traders of virtual currencies (VCs) that there are potential economic, financial, operational, legal, customer protection and security related risks associated with dealing in VCs. In February this year, the Indian government brought cryptocurrency transactions under the Prevention of Money Laundering Act, 2002 (PMLA).

Furthermore, the government offers specific measures to deter fraudulent activities related to crypto. It has advised people to report any crypto-related frauds to the Cyber & Information Security Division. The Enforcement Directorate (ED) is investigating several cases under the provisions of PMLA and Foreign Exchange Management Act, 1999 (FEMA). So far, the ED has attached/seized/freezed Rs. 953.70 crores, arrested five people and filed six prosecution complaints including one supplementary prosecution complaint. It has also issued a Show Cause Notice to crypto asset exchange Wazirx and its directors under FEMA for transactions involving crypto assets worth Rs. 2,790.74 crores.

Overall, it appears that the Indian government takes the issue of crypto-related frauds seriously. It encourages its citizens to remain vigilant of any suspicious activities and warns of the risks associated with investments in cryptocurrencies.



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