Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official

Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official
<p>Uttar Pradesh’s Minister of Finance, Pankaj Chaudhary<br></p>BI India
  • Indian Minister Pankaj Chaudhary told the Parliament that when it comes to crypto scams and frauds, India’s existing laws like the Indian Penal Code are equipped to handle the fallout.
  • The Indian government is yet to form a policy addressing the use of cryptocurrencies in the country.
  • In the meantime, the popularity of digital coins has been increasing, along with scams and frauds promising investors ‘get rich quick’ schemes.
The status of cryptocurrency may be uncertain in India but the Indian Penal Code (IPC) and other laws are equipped to handle scams and frauds, according to Uttar Pradesh’s Minister of Finance, Pankaj Chaudhary.

In response to a query in the lower house of Parliament by Member of Parliament Shashi Tharoor, Chaudhary replied, “Depending on the nature of the fraud, various laws including the Indian Penal Code 1860, are in place of protection against fraud.”

The number of scams and frauds related to Bitcoin and other cryptocurrencies have increased over the last couple of years in India, mostly due to the rising popularity of trading in digital money, which offers the allure of multiplying your money.

Rising crypto scams in India

According to CoinTelegraph, Indian investors lost almost $500 million to scams being operated in India and abroad. And, scammers are getting smarter than ever to acquire other people’s cryptocurrency.

Last year, Naisar Kothari — a resident of Bhavnagar in the state of Gujarat — was arrested under the Prevention of Money Laundering Act (PMLA). According to the Enforcement Directorate (ED), Kothari helped companies buy cryptocurrencies, transfer the amounts into wallets on foreign exchanges. The money was then used to illegally run online betting apps on websites.

Since online betting is illegal in the country, these websites were hosted from outside india — in some cases, the operators were Chinese nationals, as per the ED. "It was found that Kothari had knowingly and actively involved himself in layering the proceeds of crime and hence he was arrested...," said the statement.

In another instance, three companies based out of Bengaluru are being investigated for launching a fake initial coin offering (ICO) for a token called Morris Coin. According to the authorities, they duped 11 lakh people to invest ₹15,000 each in Morris Coin.

Nishad, a 36-year old man who is the CEO of all three companies, was arrested by the Malappuram police in Kerala under the Prize Chits and Money Circulation Schemes (Banning) Act in September 2020.

The Indian government is in the dark about crypto activity in the country

Chaudhary also reiterated the stance of Indian Finance Minister, Nirmala Sitharaman, by telling the parliament that the authorities currently do not have any data on the status of crypto trading in India.


This information [status of cryptocurrency trading in India] is not collected by the government.

Response by Minister of State for the Ministry of Finance, Pankaj Chaudhary in Lok Sabha, India’s lower house of Parliament

The country’s crypto bill, which was expected first during the Budget Session of Parliament in February and again during the ongoing Monsoon Session of Parliament, is still pending approval from the cabinet.

According to CEO Rameesh Kailasam, the government may be softening its stance against cryptocurrencies in the country. “The government seems to be still in the process of determining the way forward, which may through either an existing committee or a new one with industry consultation where required,” he told Business Insider in an earlier interview.

But for now, the regulators seem to be undecided. “The [Indian] government does not consider cryptocurrencies legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,” said Chaudhary.

For a more in-depth discussion, come on over to Business Insider Cryptosphere
— a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

Cambodia doesn’t want to depend on the dollar anymore — and its centralised cryptocurrency already has 5.9 million users

Google is bringing back crypto ads — but is leaving a lot of crypto companies out of the loop

Monero’s ‘Fluffypony’ joins Ross Ulbricht and Arthur Hayes behind bars — but for a non-crypto crime