Categories: Bitcoin Business

Cryptocurrency is ‘Ponzi’, Should be Banned: Indian Govt. Watchdog

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An Indian government official has supported the rumored bill to ban cryptocurrency. | Source: Shutterstock

By An official from an investor watchdog group in India likened cryptocurrencies to a Ponzi scheme, and voiced his support for them to be banned to protect investors.

Anurag Agarwal, chief executive officer of the Investor Education and Protection Fund Authority, made the comments Friday, according to local reports. He is also the Joint Secretary of Ministry of Corporate Affairs for the Government of India.

His support comes as the country’s lawmakers are drafting a bill that would put the death nail in the coffin of cryptos like Bitcoin from being allowed there.

Ongoing concerns

Despite cryptocurrencies gaining in respectability and more governments finding and cracking down on bad actors, Agarwal is still concerned.

According to reports, he said:

“When it comes to investor protection, the IEPFA has to take a stand against certain things. Against ponzi schemes, we are taking a stand. We think that crypto currency is a ponzi scheme and it should be banned.”

India implemented a backdoor ban on cryptocurrency in 2018, barring banks from offering services to crypto firms. | Source: Shutterstock

Who is the IEPFA?

Established in 2016, the IEPFA is a federal government agency charged with “the responsibility of administration of the Investor Education Protection Fund (IEPF),” according to its website.

“It makes refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors.”

While there is information available on its site about Ponzi schemes, there are no specifics about cryptocurrencies. Ponzi schemes fall under a grouping called “dubious schemes.”

An end to cryptos in India?

There has been a groundswell of support among Indian authorities to ban cryptos.

The Indian government is working on a draft bill that would impose an outright ban on cryptocurrencies such as bitcoin, as reported by The Economic Times, in what would be the final blow to the future of crypto in the country.

CCN reported that a draft of the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ is currently bouncing between different government departments, all of whom are toeing the government’s line.

The country already managed to cripple through regulations its best-funded crypto exchange called Unocoin. It is in its sixth year of operation and had more than a hundred employees as of February last year.

As the news developed Friday, Bitcoin’s price was unmoved, hovering around $5,100.


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