Govt to crackdown on misleading ads; use of cryptocurrency for terror funding

According to sources, the Government is cognizant of the fact that blockchain-based crypto-currencies are an evolving technology so the government will keep a close watch and take proactive steps, writes ETV Bharat's Krishnanand Tripathi.

New Delhi: In a significant development for crypto-currencies in the country, a high-level meeting chaired by Prime Minister Narendra Modi in New Delhi on Saturday decided to curb the misleading and non-transparent advertisements related to crypto-currencies that make exaggerated promises, said the government sources.

The meeting, which comes in the backdrop of the arrest of a Bitcoin scam accused Sri Krishna in Bengaluru last week, was very comprehensive, according to the people familiar with the matter.

Opposition parties, particularly the principal opposition party Congress, has accused the Bommai-led government in Karnataka of a cover-up of the bitcoin scam in the state.

According to sources, the meeting which was called to decide the way forward for crypto-currencies was the outcome of a detailed consultative process involving the banking sector regulator the Reserve Bank of India, and officials from the finance and home ministries.

The RBI, finance ministry and home ministry had done an elaborate exercise on the issue and consulted experts from across the country and the world and also looked at global best practices.

“It was strongly felt that attempts to mislead the youth through over- promising & non-transparent advertising be stopped,” said an official source.

Concerns over terror financing

In addition to curbing the misleading and over-promising advertisement related to crypto-currencies, it was also discussed that unregulated crypto markets cannot be allowed to become an avenue for money laundering and terror financing.

Early this year, the government promised to bring a bill to regulate cryptocurrencies in the country but the consultation over the bill could not be completed.

In absence of any regulatory law, crypto-currency exchanges operating in India such as WazirX, CoinDCX, CoinSwitchKuber, UniCoin and BitBNS remain unregulated.

According to sources, the Government is cognizant of the fact that blockchain-based crypto-currencies are an evolving technology so the government will keep a close watch and take proactive steps.

Sources said there was a consensus in the meeting that the steps taken in this field by the government will be progressive and forward looking.

Earlier this year, finance minister Nirmala Sitharaman had also ruled out a blanket ban on crypto-currencies saying that the government’s response on these digital currencies will be calibrated.

The government is expected to table a bill on crypto-currencies in the upcoming winter session of the Parliament.

Given the importance of the issue, the parliamentary standing committee on finance has called a meeting of experts and stakeholders early next week.

After the meeting, sources said the government will continue to proactively engage with the experts and other stakeholders.

“Since the issue cuts across individual countries’ borders, it was felt that it will also require global partnerships and collective strategies,” they added.