Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Govt alerts public from investing in bitcoin

Author: IANS/Friday, December 29, 2017/Categories: Currency

Govt alerts public from investing in bitcoin

New Delhi, Dec 29 - Noting that virtual currencies like Bitcoin have no "intrinsic value", the Indian government on December 29 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.

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 moneylaundering 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 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, cyber criminals 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.

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.

Print Rate this article:
No rating

Number of views (254)/Comments (0)

Kavita Giridhar Mallya

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free