Personal Finance

Holding a cryptocurrency? You could be jailed or fined


A high-level government panel on virtual cryptocurrencies has recommended a ban on all virtual cryptocurrencies in India. By and large, these include Bitcoin and Ripple which are not under government control. The committee submitted its report on 23 July 2019, along with a proposed draft bill, Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019.

However, the move has not come as a surprise. “The writing was on the wall regarding cryptocurrencies since April last year, when the Reserve Bank of India (RBI) barred banks and financial institutions from dealing with cryptocurrencies. That was just the trailer, this report and draft bill have crystallised this matter now. If this proposal is approved, India will join the countries which have banned cryptocurrencies,” said Nirav Maniar from International Business Advisors (IBA), an accounting, tax and legal advisory firm.

The committee is, however, favourable towards launching an official digital currency. “As virtual currency and its underlying technology is still evolving, the group has proposed that the government may establish a standing committee to revisit the issues addressed in the report as and when required,” it said.

The ban on virtual currencies comes along with a fine of Rs 25 crore and imprisonment up to 10 years for any activity related to virtual currencies, which is carried out by individuals or companies. So if you have a few crypto units lying forgotten in some account, there may be consequences to bear. We tell you what you should do and what such a law entails.

A cryptocurrency user, who spoke to Mint on the condition of anonymity, said if someone needs to liquidate crypto holdings, the person can do so through another person based in another country. Many individuals trade through family or friends in other countries.

Meanwhile, the crypto world remains ever-changing. Prathibha Bangera, lawyer at Mumbai-based law firm Toprite Juris, said, “The Constitution of India Article 19(1)(g) gives us the fundamental right of freedom to conduct business in any sector or trade.” If this angle is pursued by crypto startups and investors, things might get more interesting. Gupta concluded, “At a global level, the industry will keep on growing, innovation will keep on happening, and India will lose out its edge, if after five years they decide to make cryptocurrencies legal, it would be too late, and they will simply end up playing catch up.”

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