In the crypto world India has been in the spotlight lately and the news of its Anti-Crypto laws spread like wildfire last year. Recently another issue popped up because of the Indian Cryptocurrency ban when it turned out that millions of Bitcoins were retrieved in a scam. The Pune Police seem to be facing a conundrum where they need to transfer $1.2 million Bitcoins worth approximately 85 million Indian Rupees but are unable to do so because of the current law. The money has to be transferred into the treasury branch of the State Bank of India. But the question still remains how can cryptocurrency trading be carried out when it is not even allowed by the state’s laws?
The Ponzi Scheme
Last year the Ponzi scheme hit the police with a situation where 244 units of BTC were stolen and later retrieved. The cyber department of Pune is supposed to transfer the amount into the treasury of the local branch.
A local trading company (in the Worli branch of the Central Bank of India) that goes by the name of Discidium Internet was hired by the Pune Police department to put an end to this problem. They were given the task of converting the BTC into Indian Rupees. The money was then to be transferred to the State Bank. However, before the task could be carried out the Reserve Bank of India (RBI) froze the account of the trading company.
The RBI’s Stance
Jairam Paygude, the senior inspector at the Cyber Department of Pune Police, informed the public of this issue and highlighted the fact that the RBI does not allow Cryptocurrency exchange or trading. This makes the situation for Pune Police rather difficult since no exception has been made by the RBI in order to resolve the issue.
The head of the district government, Ujjwala Pawar, has given a statement as per which a formal request by the police will be made so that the RBI officially unfreeze the account of Discidium. However, the Reserve Bank of India has not taken such a step so far.
The 2019 Bill
Banning of Cryptocurrency and Regulation of Official Currency Bill 2019 is what poses this issue at the moment. According to this Bill, if a person is found involved in trading, exchanging, selling or buying, mining, etc of cryptocurrency they shall be imprisoned for a period of ten years. Although it is only a bill and has not been passed yet, if it does become a law the breach of it would result in such serious consequences. It has not even been the official status of a law yet it has created such havoc in the crypto market of India. Some may say that cryptocurrency is the future but that does not seem to be the case in India at the current time. Thus, a number of local companies dealing in cryptocurrency are transferring to other countries in fear of criminal repercussions. The issue of the Ponzi Scheme still remains unsolved because of the 2019 Bill and the RBI’s refusal to make an exception in this situation.