Indian Government: Cryptocurrencies are a ponzi scheme, should be banned

On 27th April, Indian Government took out a statement stating virtual currencies such as Bitcoin and other cryptocurrency are often used for terror financing or in the illegal drug trade and are a Ponzi scheme designed to dupe investors. They should be banned.

“Cryptocurrency is a Ponzi scheme and it should be banned. This is the view of the IEPF (Investor Education and Protection Fund) authority and we want the government to take a stand on it. By not taking a decision, we are harming investors,” said Anurag Agarwal, joint secretary in the ministry of corporate affairs.

This is only a statement, and the decision to make virtual currencies legal or illegal hasn’t been confirmed. In May 2019, the election results will be out. It is speculated that the status of virtual currencies will be revealed after the election results.

The Central Bank of India, Reserve Bank of India (RBI), has warned investors about cryptocurrency. The RBI has banned Indian banks to serve cryptocurrency related companies. Currently, there are no guidelines either by the Government or by the RBI regarding cryptocurrencies.

Legality of Cryptocurrency in India

Cryptocurrencies are not illegal in India. Only the RBI debars banks from serving cryptocurrency companies. Storing, buying, selling and trading is currently legal in India. Investors in India use controlled P2P trading to trade cryptocurrencies.

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