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Government warns about Cryptocurrencies threat

According to investigation agencies here, with the demand and price of cryptocurrencies on the rise, cybercriminals have found innovative ways to dupe those looking to invest.

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The Indian governemnt has compared the cryptocurrency to ponzi schemes. Wikimedia Commons
The Indian governemnt has compared the cryptocurrency to ponzi schemes. Wikimedia Commons
Noting that virtual currencies like Bitcoin have no “intrinsic value”, the Indian government on Friday sounded the alarm on the phenomenon of cryptocurrencies, comparing them with the notorious Ponzi schemes floated to dupe gullible investors.
A Finance Ministry statement said that as virtual currencies (VCs) were not backed by assets, their prices are entirely a “matter of mere speculation”.
“Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”
Named after an Italian immigrant to the US, Ponzi schemes operate by enticing a gullible group with the promise of very high returns in a short time but is based on paying off the early investors from the cash from newer ones. The whole structure collapses when the cash outflow exceeds the inflow.
“VCs don’t have any intrinsic value and are not backed by any kind of assets, ” the statement said.
“The price of bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their prices There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes,” it added.
cryptocurrency dealer Pluto Exchange on Thursday announced the launch of mobile application for transacting in VC. Wikimedia Commons
cryptocurrency dealer Pluto Exchange on Thursday announced the launch of mobile application for transacting in VC. Wikimedia Commons
Noting that VCs are stored in digital format, the ministry said this makes them vulnerable to mishaps like hacking, loss of password and malware attack “which may also result in permanent loss of money”.
“As transactions of VCs are encrypted they are also likely being used to carry out illegal/subversive activities, such as terror funding, smuggling, drug trafficking and other money-laundering acts,” it said.
It clarified that VCs are not legal tender and do not have any regulatory permission or protection in India.
“VCs are neither currencies nor coins. The Government or Reserve Bank of India (RBI) has not authorised any VCs as a medium of exchange. Further, the government or any other regulator in India has not given license to any agency for working as an exchange or any other kind of intermediary for any VC,” the statement said.
The government also recalled that the Reserve Bank of India had cautioned potential investors about the risks in investing in cryptocurrencies like bitcoins on three earlier occasions — in December 2013, February 2017 and December 2017.
According to investigation agencies here, with the demand and price of cryptocurrencies on the rise, cybercriminals have found innovative ways to dupe those looking to invest.
Bitcoins in India, have been trading at more than Rs 10 lakh each, while people are investing amounts ranging from Rs 3,000 to several lakhs of rupees.
Due to the storage of VC's in digital format, it becomes easier for hackers to launch cyber attacks. Wikimedia Commons
Due to the storage of VC’s in digital format, it becomes easier for hackers to launch cyber attacks. Wikimedia Commons
Bitcoin values in New York, for instance, have soared nearly 1,600 per cent over the past year and currently range upwards of $15,000.
Meanwhile, cryptocurrency dealer Pluto Exchange on Thursday announced the launch of India’s first mobile application for transacting in virtual currencies.
At a press conference here, Pluto Exchange founder and Chief Executive Bharat Verma said his company is all set to launch the country’s first app-based wallet that enables Bitcoin transactions using a mobile number.
“All other apps already in the market do transactions using bitcoin addresses, which are long and prone to error while copying. Pluto Exchange will change this scenario by enabling transactions using mobile numbers only, which are just 10 digits,” Verma said.
He also said the app would permit a range of transactions, including payments, remittances, business-to-business commerce, supply chain finance, asset management and trading.

Next Story

New Survey Indicates, Indians Worry About Terrorism, Unemployment And Corruption The Most

"At least 73 per cent Indians are optimistic that as a nation we are headed in the right direction. The global average paints a dismal image, where the majority (58 per cent) feels that they are headed in the wrong direction," the findings showed.

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The "What Worries the World Global Survey" by global market research firm Ipsos showed that 45 per cent of Indians are most worried about terrorism, 44 per cent about unemployment and jobs and 42 per cent about financial and political corruption. Pixabay

 As the country entered the seven-phase voting from April 11, a new survey said on Monday that Indians are most worried about terrorism, followed by unemployment and corruption.

The “What Worries the World Global Survey” by global market research firm Ipsos showed that 45 per cent of Indians are most worried about terrorism, 44 per cent about unemployment and jobs and 42 per cent about financial and political corruption.

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India, however, bucked the global trend of pessimism where 22 countries out of the total of the 28 markets covered in the survey felt their country is on the wrong track. Pixabay

Apart from these issues, a significant number of Indians are also concerned about crime and violence (33 per cent) and poverty and social inequality (29 per cent).

“Pulwama terror strike has propelled terrorism to the fore. It was way down in the pecking order in the past waves. Terrorism is bothering Indians most. Likewise, lack of jobs is weighing on the minds of Indians and government,” said Parijat Chakraborty, Service Line Leader, Ipsos Public Affairs, Customer Experience and Corporate Reputation.

“Similarly, more concrete steps are needed for tackling corruption. While strategies are being formulated by the government to address them, our survey shows that Indians are preoccupied with concerns around these macro issues and will like them to be mitigated,” Chakraborty added.

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Meanwhile China (94 per cent) inspires the most confidence about its national direction as 9 in 10 Chinese citizens say that the country is moving in the right direction. Pixabay

India, however, bucked the global trend of pessimism where 22 countries out of the total of the 28 markets covered in the survey felt their country is on the wrong track.

“At least 73 per cent Indians are optimistic that as a nation we are headed in the right direction. The global average paints a dismal image, where the majority (58 per cent) feels that they are headed in the wrong direction,” the findings showed.

Meanwhile China (94 per cent) inspires the most confidence about its national direction as 9 in 10 Chinese citizens say that the country is moving in the right direction.

Also Read: Ex-Afghanistan Warlord Claims, ‘No Doubt’ Pakistan ‘Supports’ Taliban
Saudi Arabia is in the second place (84 per cent), followed by India (73 per cent) and Malaysia (57 per cent).

The survey was conducted in 28 countries where 20,019 interviews were conducted between February 22-March 8. (IANS)