Govt favours a ban on cryptocurrencies to protect investors

The Ministry of Corporate Affairs (MCA) has favoured a ban on crypto currencies, with its investor protection arm, Investor Education and Protection Fund (IEPF) Authority, pitching for the policy change. “What I am saying is when it comes to investor protection, we have to take a stand against certain things, whether it is a ponzi scheme. And we think that crypto currency is a ponzi scheme and it should be banned,” CEO of IEPF Authority Anurag Agarwal told reporters.

The IEPF, which is part of the MCA, is for promotion of investor awareness and protection of investor interest. Agarwal, who is also a joint secretary in the MCA, said that the IEPF Authority will soon come out with an app that will allow citizens to report issues which they feel need to be investigated by the MCA. The app is expected to be launched next month.

In 2017, a panel, formed by the finance ministry to suggest measures to deal with virtual currencies (VCs), had recommended the government to take immediate steps to stop use of VCs such as bitcoins to protect people from potential frauds and curb money laundering. Unprecedented increase in value of VCs like bitcoin in the past one year can expose people to huge financial risks, the blame of which will ultimately land at the door of the government.

The panel suggested that the government should launch a campaign to discourage people from buying digital currencies and stop advertisements by VC intermediaries. In April 2018, the Reserve Bank of India directed banks and financial institutions to stop all banking activities and financial transactions with crypto currency exchanges.