By now, we’ve just about heard it all from CRYPTO SKEPTICS. From some of the world’s wealthiest investors such as Warren Buffet to economists such as Nouriel Roubini. This time, however, the skepticism is coming from another party: the Indian police.
Police from the Northern Indian state of Jammu and Kashmir recently issued a warning to Indians against investing in cryptos. Cryptos aren’t backed by the government or the reserve bank. They thus pose a heightened risk to their investors and could lose them money. Cryptos also use an encrypted distributed ledger, making the transactions private. This makes them highly susceptible to drug trafficking and terror funding, the police explained.
Cryptos Are Highly Risky
The Inspector General of police in the state of Jammu and Kashmir decided to voice his opinion on cryptos, and he had no kind words. Speaking to The Business Standard, the second-largest English publication in India, the IG stated:
The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies such as bitcoin because there is a real and heightened risk associated with them
According to the IG, the lack of a central regulatory authority governing cryptos further heightens the risk. This leaves the investors prone to unprecedented losses, he added. The retail investors are the ones who stand to lose the most should cryptos crashThe IG further condemned some of the scammers in the crypto space. He urged the public to be alert to avoid falling victim to such scams. India has recorded a number of crypto scams, including one involving a leading Bollywood actress. The actress, Shilpa Shetty, was alleged to have been working with her husband to defraud over 8,000 investors of over $300 million. The scam involved a referral method where those who referred other investors gained Bitcoin.He ended with a warning against the potential risks that cryptos pose:
As there is no regulatory oversight on cryptocurrencies which use blockchain technology, all transactions are encrypted and there is high risk as this platform is used for carrying out subversive activities, smuggling, drug trafficking, human trafficking, terror funding and money laundering
Govt. Panel Calls for Bitcoin Ban
India’s rocky relationship with cryptos was dealt another blow recently by the findings of a government panel. The panel began its work in November, researching on cryptos to recommend the way forward. According to CNBC-TV 18, the panel recommended that the country bans all cryptos.Citing sources familiar with the matter, the report revealed that the panel had called on the Reserve Bank to step in and ban cryptos. Led by the country’s Secretary for Economic Affairs, the panel even suggested that those who use cryptos should face the law.The law should enlist punitive measures that the government and its investigative agencies can take in case it finds anyone or any entity trading or dealing/ holding it.