India cracking down on ‘illegal’ cryptocurrencies

India cracking down on ‘illegal’ cryptocurrencies
Cryptocurrencies are illegal in India and the government fully intends to stamp out their use, according to the finance ministry.

“The government does not consider crypto currencies as legal tender or coin and (will) take all measures to eliminate the use of crypto assets,” Finance Minister Arun Jaitley said on Thursday.

Cryptocurrencies are not regulated in India, the second-largest country in the world by population after China. India has a big share of the cryptocurrency market, accounting for about 10 percent of all bitcoin transactions.

“The government will now either come out with a legislative mechanism or make suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and to penalise entities and individuals who are involved in their trade and circulation,” said Monish Panda, founder of Monish Panda & Associates law firm, as quoted by Indian media.

“We will have to wait and watch as to what will be the final framework of such legislation.”

Last year, the Indian Finance Ministry called bitcoin and other cryptocurrencies a ponzi scheme, “which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money.”

Bitcoin users in India have been facing difficulties with deposits and withdrawals this year after the country’s banks cracked down on crypto-trading. In December, the Indian Income Tax Department raided bitcoin exchanges across the country, seeking to identify cryptocurrency traders.

Bitcoin was down two percent on Thursday, trading near $10,000 – a 50-percent drop from the $20,000 peak seen over a month ago.

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