India Moves To Ban Cryptocurrencies

The Indian government has drafted a bill that would ban cryptocurrencies and attempt to regulate any official digital money, according to reports.  

The proposed bill is appropriately called the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019,” and the draft has been distributed to various different government departments.

A panel meant to draft cryptocurrency regulation legislation was formed last year under the leadership of Finance Secretary Subhash Chandra Garg, and many government departments in India support the ban.

These include the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA). The idea is to ban the “sale, purchase and issuance of all types of cryptocurrency,” according to an unnamed government source cited by The Economic Times.  

The final law will be put forward at the end of May, when the new government takes control after elections. Many government agencies feel the need to move on cryptocurrency is urgent.

The committee pushing the bill say crypto makes it easier to launder money, and that it could be banned under the Prevention of Money Laundering Act as well. It also argues that crypto is being distributed as a sort of get-rich-quick scheme that falsely promises massive returns.

The panel called these tactics Ponzi schemes and said they were being used to “defraud gullible investors.”

One such case involved a man in India who tricked 12 people out of $250,000 with a scam involving a fake cryptocurrency named after the Indian version of the show “Who Wants To Be A Millionaire,” according to reports.

Pritam Patil allegedly asked the victims to invest in the initial coin offering (ICO) of his “KBC Coin,” named after Kaun Banega Crorepati, a wildly popular Indian show.

Patil told the victims that the KBC coin was worth $0.0056, but that it would rise to $1 by March of 2018. He is believed to have been running the scheme since around the crypto surge at the end of 2017.

The scammer asked victims to pay in cash, and he didn’t give them any sort of documents about the company. After he got the money, he apparently changed the name of KBC to AFC Mint coin, while the website he was running shut down in September of 2018.

Victims tried to get a hold of Patil, but they were told the business shut down and they wouldn’t receive any returns at all.