Are Cryptocurrencies a Scam? The Finance Ministry in India Declares That Cryptocurrencies Are ‘Similar to Ponzi Schemes’
The government of India’s existing public cynicism of cryptocurrencies has doubled. In another statement released on 29 December, the Ministry of Finance in India cautioned inhabitants against the dangers connected to trading cryptocurrencies. They also compared assets that are block-chain based such as Bitcoin to ‘Ponzi schemes.’ The statement presents the third caution this year from an Indian government body, showing an increasing rate of concern among the country’s leading regulators. CoinDesk reported that in 2017, the Reserve Bank of India, gave two similar cautions; one in February and the other early in December to individuals who hold cryptocurrencies and trade them. But, the latest statement from the Finance Minister one more indicates the way the government is reacting to the increase in the cost of numerous cryptocurrencies all over the world.
It says: ‘The cost of bitcoin and different virtual currencies is therefore wholly a matter of total assumption which is due to the increase in their prices as well as instability.’ ‘There is a genuine and higher threat of investment bubble similar to the one witnessed in Ponzi schemes. Consumers should be vigilant and very careful to prevent becoming ensnared in Ponzi schemes like these.’ In another part of the notice, the Ministry highlighted that India does not acknowledge any cryptocurrency as an officially authorized tender and that this country does not provide any license to sanction any cryptocurrency exchange. So, users will cater for the possible operational, financial, security and legal hazards connected, when making cryptocurrencies investments, it stated.
A note like this can be aimed straight to existing Indian cryptocurrencies traders since information from CoinMarketCap indicates that Kointex, which is a more famous cryptocurrency exchange in India, presently experiences a trading volume of $115 million in 24 hours.
However, when these warnings are overlooked, it can be noted that there is a discussion going on in India about whether cryptocurrencies need to be regulated in the state and how.
The Supreme Court in India has before asked some government agencies to react to an online petition which asks for a proper regulation over bitcoin. Actually, it was noted in August that a proposal for cryptocurrency regulation had been given to the Finance Ministry. However, it is not certain what this regulation’s timeline and content were. Due to this, the latest statement from the state body might still indicate a rule that is more restrictive.