November 11, 2021
Manas Tiwari
There have been enough debates around cryptocurrencies over the last 12 to 18 months. Some believe that it is the greatest innovation in the financial sector, while others think that it’s a bubble created to fool youngsters. Both can be right. Both can be completely wrong. We don’t know yet. The only thing we are sure of as of now is that millions of Indians have invested in cryptocurrencies. A report suggests that the number of crypto investors has crossed 10 crore, while the crypto platforms are claiming that there are 2 crore, crypto owners, in the country.
In either case, the number is already big enough to convince the government that cryptocurrencies should not be banned. The same government had tabled a bill proposing a crypto ban only less than 12 months ago. There were also conversations about the RBI introducing a digital rupee as an alternative to the existing cryptocurrencies. The sheer size of investors and investment (which hasn’t been made public) has forced the government to think otherwise.
Not only have these arguments been settled, but, the government seems to have completely given up on the idea of banning cryptocurrencies. Instead, it is planning to regulate them with a new
w bill that can be introduced in next year’s Union Budget. Honstly, India needs these regulations now more than ever.
Let’s be practical here – the investors are not stopping now. Most people look at crypto as easy money. They have been made to believe that Bitcoin, Dogecoin and others can make them rich overnight. So much so that teenagers who never cared to invest in any other financial instrument are also pumping money into the crypto market. It’s almost like crypto has created a new category of investors.
These investors need protection. They are young, ambitious and, in some cases, lost.
The growing scams
The founders of various crypto platforms and experts from the industry have been trying their best to inform the investors and help them make better decisions. Yet, people keep falling into traps. The latest Squid game crypto scam should be an eye-opener. It came as a shock to most stakeholders. The Squid Game token experienced an exponential rise soon after its launch. However, a market crash last week saw investors lose millions of dollars.
The ‘play to earn’ was inspired by the South Korean drama Squid Game. It allowed people to buy tokens and use them in online games to earn more tokens. The creators promised that these tokens could be exchanged for other cryptocurrencies or national currencies. The token is now defunct.
This isn’t the only recent crypto scam. A new report by Check Point Research (CPR) has highlighted that fraudsters are also using Google Ads to scam crypto investors. It claims that hundreds of thousands of dollars worth of cryptocurrency has been taken from victims within this past weekend. As per CPR, multiple scamming groups are involved in the practice.
This is certainly not the end. This is the beginning. These kind of scams will only grow as cryptocurrencies become more popular.
Where are we with regulations?
India doesn’t have any regulations for cryptocurrencies. We have seen some steps in that direction but, anything concrete is yet to come. For now, the Internet and Mobile Association of India (IAMAI) has set up a formal board, Blockchain and Crypto Assets Council (BACC) to oversee the implementation of a self-regulatory code of conduct for member crypto exchanges. The crypto platforms want to play the wait and watch game when it comes to the regulations or a new crypto bill.
“We have to see the fine print of any such decisions to comment on it to avoid speculations. But we respect the forward moves being made by the government in regulating and bring apt policy changes to the crypto assets ecosystem,” Nischal Shetty, Founder, WazirX told India Today Tech.
All signs suggest that a new crypto bill can be tabled in the parliament during the winter session. It will provide us with a clearer picture.
“It would be great if we can formulate policies for registering crypto exchanges in India and the same for foreign exchanges setting up businesses in India. Furthermore, more inroads in polices should be made for accounting standards and mechanisms to counter suspicious activities and/or transactions, enable traceability and combat Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT),” Shetty said.
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