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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

The Great U.S. Government Shutdown

The Senate stands at an impasse while the nation collapses around it.

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U.S., Shutdown
The dome of the U.S. Capitol is seen beyond a chain fence during the partial government shutdown in Washington, Jan. 8, 2019. VOA

By Vishvi Gupta

The partial shutdown of the Government of the United States has now entered Day 31. With as many as 800,000 federal employees furloughed, the entire nation remains in a turmoil due to the longest government shutdown in the history of United States.

The shutdown which started on December 22 of 2018, due to the disagreement of United States Congress and the President Of United States on ‘Border Security Funding’  has followed us well into 2019 and still has bleak chances of ending.

President Donald Trump remains undeterred in his conquest to get the funding for wall, no matter who pays for it, it seems. In a tweet and several different speeches, during the presidential election race of 2016, the then presidential candidate Donald Trump promised that “Mexico will pay for the wall”. However, he now demands almost $5Bn from the taxpayers of the country.

The country’s senate remains at an impasse and the only ones affected? The people.

Thousands of federal employees joined hands in protests and social media to share their stories of how exactly the shutdown is affecting them. Many employees have had to set up Gofundme donation websites to get by or to meet their basic needs. The shutdown led the hastag, ‘#ShutdownStories’ trend on twitter. Even students who rely on free or reduced fee meals at school are impacted. The lunch menus at schools are being revised so as to conserve food and funding.

As the shutdown drags on, it sees many businesses also take a hit. Mohammad Badah, a local falafel street vendors who saw a steep fall in his sales said,” Usually I do in this area, like 60-70 customers, so far I did like 19 customers today.” Badah can now afford to operate only one of his two trucks.

Also Read: U.S. Senate Stays Divided Over Trump’s Immigration Deal

Meanwhile, there is no budging on the democratic or republican side. President Donald Trump proposed a deal to the democrats in which he backs away from a simple demand for border funding and now offers a 3 year extension of the program for refugees and immigrants who came to America illegally as minors, also called ‘Dreamers.’ Democrats, however rejected this deal saying that Donald Trump’s proposal is “unacceptable” and said the president’s proposal was “not a good-faith effort.”

The Senate stands at an impasse while the nation collapses around it.