Due to rising investment day by day in cryptocurrency in India, Indian Income Tax department conducted a survey on operational exchanges in India. Although earlier it was projected as raids on cryptocurrency exchanges but in reality, it was a survey undertaken to secure information about transactions, parties involved and bank accounts. The wide objective of the survey is to do a scrutiny of overall transactions, trade data and gather information about cash involvement and any kind of suspicious activities. Most of the cryptocurrency exchanges are operational in Mumbai, Hyderabad, Pune, Bangalore and New Delhi.
Connecting with the earlier episodes, Supreme Court of India has asked views of govt. on cryptocurrency as per a PIL. SC has asked about the plans and stand of Indian Govt over Bitcoin and other popular cryptocurrencies since it has not been regulated till date but on the same not announced illegal. Unocoin and Zebpay was one of the first wallets to hold Bitcoin. It was month of August 2017 when cryptocurrency trade and exchange platforms launched in India back to back like- Koinex, Bitxoxo, Coinsecure etc.
Bitcoin as Most Valuable Cryptocurrency
Post demonetization in November 2016, Indian Govt. has revised interest rate of FD, PPF and saving accounts. Hence public moved on alternate options to gain good return. Till date not a single investment plan has been as successful as cryptocurrency to offer highest return. This has become reason of diversion of fund from traditional fund management like- Mutual Fund, Equity, share etc. towards most hyped virtual currency.
Recently most of the cryptocurrencies gained up to 100% in a short span of 4 month and top 5 of them are Bitcoin, Ethereum, Litecoin, Ripple and IOTA. Their quick jump and return changed market scenario of traditional investment and holdings. Everyday large no of people are buying cryptocurrencies on exchange platforms.
But it seems that Govt. and Central bank is not going take Indian Currency for granted. They are keeping a hawk eye on every transaction and right now people are investing huge in crypto. Our country is a developing country and govt highly depend on taxes for future plans, developments and options of fund. Somehow they are realising that when banks will not have reserved money then how will they get fund for domestic works, infra, public service etc. Lack of funds will be a challenge for govt.
Before this survey, RBI has been issuing regular caution to alert common people to stay away from crypto but soaring price of virtual currencies has pulled lot of people. Being a de-centralized entity, cryptocurrency, govt. will have no control on the buy, sell and trade. Paying tax by all these companies don’t ensure that their business is legitimate because as per cruptocurrency is not managed by any institution and anyone can hold ownership of virtual coins after buying it.
Any exchange operational in India is not registered or authorized by govt or SEBI, the higher body providing license of trading and exchange in India. So it is a big challenge to control investment of people in cryptocurrency on various platforms.
These are some serious threats that can not be ignored like-
These exchanges can stop trading and withdrawal anytime without any prior intimation.
As they are not regulated then govt can not take any action against them.
A quick panic may create in public if they feel their money stuck.
As per company registration act, there is no such word ' Cryptocurrency", that exists in terms of legal business.
These are some issue that can trigger RBI and Govt to create certain limitation. The cautionary notices from RBI could be taken as initial warning to either stop investing in cryptocurrency or withdraw money from exchanges. Due to being de-centralized, you won’t have any supreme authority to complain.
As discussed with crypto enthusiast Piyush Kankane," We can take recent steps of Govt. as beginning of tightening the nose and take precautionary step for protection of real currency. Because public will cry foul if any of the exchange will stop working, halted log in or withdrawal of currency. This is the reason behind all exchanges where they propose to invest money at your own risk. They don’t say to invest and accept money on their T&C. Piyush also said that FUD (Fear, Uncertainty & Doubt) from Govt. end will create a question of credibility towards mushrooming crypto exchanges in India."
So be prepare for worst from Indian Govt. and take calculative risk that will not hamper your funds and future plans. Don't take it as only option to gain return but as one of the option to make quick money. Don't forget that sudden capital gain will bring tax liability too.