Jail for buying Bitcoin, Ethereum, Litecoin or other cryptocurrencies? Yes, you read that right! There is more

If you are involved in any activity related to selling or buying a cryptocurrency (Bitcoin, Ethereum, Litecoin, NEO, DASH, others), you will have to face the penal action and may land up in jail as every action related to a cryptocurrency will now be termed a crime in India. You may be slapped with a fine in millions of rupees under the law that the government is likely to introduce. The Inter-Ministerial Committee formed by the government has recommended the same in its report, which was handed over to the Finance Ministry on Monday.

50 million traders active in crypto trade by 2018

According to the government report, till February, 2018, there were as many as 5 million traders in the crypto trade and there were 24 active exchanges in the country. Surprisingly, these traders did a business of one billion rupees a day, using about 1500 bitcoins. In order to formulate strategies on issues like cryptourrency, virtual and digital currencies, the government had constituted the committee under the chairmanship of Secretary of Economic Affairs in November 2017. The committee included Information Technology Secretary, the Sebi Chairman and the Deputy Governor of the Reserve Bank of India.

Crypto trader may be sentenced for 10 years

The committee has recommended imprisonment of one year to ten years for those who sell and buy cryptocurrencies in India. Similarly, those involved in such activities may have to pay millions as fine. The committee has recommended bringing the Banning of Cryptocurrency and Regulations of Official Digital Currency Bill 2019, besides suggesting the launch of digital currency.

No nation gives recognition to cryptocurrency

According to the committee, Indian consumers need to be protected from cryptocurrency or bitcoin as majority of them have been cheated through it. The report further stated that recently, a scam worth Rs 2000 crore was done in the name of Bitcoin, wherein many consumers were cheated. The committee said that no country has so far not recognized cryptocurrecy as a legal tender. China too has recently banned the crypto trade with Chinese currency in 2017.

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Recommendation for digital currency 

The report has also stated that if the government wants, it can issue digital currency on behalf of the central bank, terming it as Central Bank Digital Currency (CBDC). But it should be decided by the central bank if the digital currency will work for 24 hours or not. Just like a currency note, no one will be able to know who is using which digital currency. Both retail and wholesale purchases will be possible through digital currency, the committee recommended.