Police warning against dealing with cryptocurrency

The Economic Offences Wing has warned public not to deal with cryptocurrencies including Bitcoins, Ethereum, Ripple and more.

“A few cases of investors of cryptocurrencies being cheated have been reported in Tamil Nadu. Cases have been registered and accused were arrested. The public is hereby advised not to deal with cryptocurrencies including Bitcoins, Ethereum, Ripple and more. Those trading in virtual currencies were doing so at their own risk, given that the Central bank has not given a licence or authorisation to any company to deal in such cryptocurrencies,” the warning said.

In a press release, the special unit of police also said cryptocurrency is neither a currency as per the definition of currency in India nor a derivative as well. It is a virtual currency akin to goods such as gold or precious metals which behaves more like assets. Most cryptocurrencies including bitcoin, ripple, litecoin and ethereum are not backed by a sovereign guarantee, and therefore are not considered as legal tender. Further, unlike other investment avenues, cryptocurrencies are not regulated by the government entities nor does a regulatory body watch over it. Investors have no official authority to redress their grievances. The government does not recognize cryptocurrencies as legal tender.

The Reserve Bank of India has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies such as money laundering, consumer protection and market integrity. In view of the associated risks, entities regulated by RBI were prohibited from dealing with or providing services to any individual or business entities dealing with or settling virtual currencies. A draft bill has also been proposed to ban cryptocurrencies in the country and provide for an official digital currency, the release added.

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Printable version | May 7, 2021 9:24:45 AM |

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