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Alleged India’s Ban on Crypto May End Up With a Fine Instead of Jail

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Regulation

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Sead Fadilpašić

Journalist

Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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Last updated:

June 26, 2023

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The Indian draft bill “Banning of Cryptocurrency and Regulation of Official Digital Currency,” which aims to introduce up to 10 years jail term for cryptocurrency owners, may be softened, according to a new report by local media.

A “mild punishment” might be included in the draft bill for the individuals who are using cryptocurrencies on a “non-commercial basis,” BloombergQuint, an India based joint venture of Bloomberg News and Quintillion Media, reported, citing an undisclosed government official.

This source, who says is not authorized to talk to the media, claims that, if these changes would be included and the law would be implemented, all people who are using crypto in such a manner would have to pay a fine, which would be established by the Central Government.

According to the report, the draft bill will be submitted to the Finance Minister in ten days, but also given to numerous government departments in order to get consultation from them.

Also, it added that in a letter to revenue secretary Ajay Bhushan Pandey, Corporate Affairs Secretary Injeti Srinivas allegedly writes: “Till the time Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019 is implemented, the government must send a strong signal to culprits, and protect the interest of investors.” The main worry here is that various fraudulent cryptocurrency trading schemes “may take advantage of gaps in regulatory frameworks to cheat investors, and strict action needs to be taken against them,” stands in the article.

It added that the Ministry of Corporate Affairs is seeking to punish people who are running cryptocurrency Ponzi schemes and enticing people into investing in cryptocurrencies on the promise of inflated returns, after several such cases have been allegedly reported, and until the draft Bill is implemented. As Srinivas supposedly says, the crime would fall under the Prevention of Money Laundering Act 2002 whereby the individuals would be punished by imprisonment up to one year and a fine.

As previously reported, this draft bill, which is apparently a part of the report of the panel led by the Economic Affairs Secretary, includes a proposal whereby a penalty and a jail term of 1 to 10 years can be given by the Central Government to individuals who “mine, generate, hold, sell, transfer, issue or deal in cryptocurrencies directly or indirectly.” And while this, along with the creation of the “Digital Rupee”, will supposedly happen in consultation with the central board of the Reserve Bank of India (RBI), the central bank of the country, the RBI denied any communication from the Central Government, receiving a copy of the draft Bill, or endorsing a complete ban on crypto.