ED probing 8 cryptocurrency-related fraud cases: Centre tells RS amid regulation buzz

While not disclosing intricate details, Union Finance Minister Nirmala Sitharaman told Rajya Sabha that the ED is probing 8 cryptocurrency-related fraud cases. This was in response to a starred question by BJP MP Sushil Kumar Modi on November 30 wherein he sought information about the number of such instances and the value of such scams. Speaking on the floor of the Upper House, she also mentioned that no decision has been taken on banning advertisements relating to the unregulated digital currency.

Nirmala Sitharaman stated, "The Government does not collect specific information on cryptocurrency related frauds. Further, ‘Police’ and ‘Public Order’ are State subjects as per the Seventh Schedule of the Constitution of India. States/UTs are primarily responsible for the prevention, detection, investigation and prosecution of such crimes including financial frauds through their Law Enforcement Agencies. The State Police takes legal action as per provisions of law against the offenders. However, eight cases related to cryptocurrency related fraud are under investigation by the Directorate of Enforcement." 

This comes amid the Centre's move to table The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Winter session of Parliament. The Bill aims to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. It also seeks to prohibit all private cryptocurrencies in India except for certain exceptions to promote the underlying technology of cryptocurrency and its uses. 

PM Modi expresses concern over cryptocurrency

On November 13, PM Modi chaired a meeting on the way forward for cryptocurrency and flagged the issue of misleading non-transparent advertising regarding the same. As per sources, this meeting was conducted after a consultative process done by the Reserve Bank of India (RBI), the Finance Ministry and the Ministry of Home Affairs. While asserting that crypto markets cannot be allowed to become avenues for money laundering and terror financing, sources indicated that the Centre will continue to engage with all stakeholders.

Speaking publicly on cryptocurrency for the first time during his keynote address at The Sydney Dialogue on November 18, PM Modi remarked, "It (global collaboration between countries) should also recognise national rights and at the same time, promote trade, investment and larger public good. Take cryptocurrency or bitcoins for example. It is important that all democratic nations work together on this and ensure that this does not end up in wrong hands, which can spoil our youth."