Cautionary Notice Issued Against Cryptocurrencies By Indian Police

On Wednesday, the Jammu and Kashmir State Police of India issued a public advisory warning against the use or investment in cryptocurrencies. The advisory note issued was signed by the Inspector General of Police.

State Crime Branch J&K, said, “The general public is therefore informed, not to make any type of investment in crypto – currencies/ virtual currencies (vcs) because there is a real and heightened risk associated with them. this can result in a sudden and prolonged crash, exposing investors; especially retail consumers who stand to loose their hard –earned money. public needs to be alert and extremely cautious to avoid getting trapped in such fraudulent schemes.”

The warning further stated, “The RBI did not give any license/authorization to any entity/Company to operate in such schemes or deal with Bit-coin or any Virtual Currency and such Crypto-currencies do not have any regulatory permission or protection in India. As there is no regulatory oversight on the Crypto-currencies which uses Block-chain technology, all the transactions are encrypted and there is high ended risk as this platform is used for carrying out subversive activities, smuggling, Drug Trafficking, human trafficking, terror funding and money laundering activities.”

The warning follows the footsteps of the recent parliamentary session when Varun Gandhi, Member of Parliament (MP), asked in the Lok Sabha what the government’s position on cryptocurrency was.

A questionnaire was submitted to the House where several questions were asked about cryptocurrencies. As previously reported, rumors of a national cryptocurrency have not been unfounded. It should also be noted that the Inter-Ministerial Committee working on regulations includes members of the Ministry of Electronics and Information Technology, SEBI, RBI, CBDT and the Economic Affairs Department. This suggests how broad government believes that the scope of regulation in this particular area.

However, an excerpt of the answer provided by Shri Pon. Radhakrishnan said, “… in absence of a globally acceptable solution and the need to devise technically feasible solution, the Department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations.”

It is safe to say that the government is not going to impose a direct ban, and it will probably spend a little longer deciding the best course.