Cryptocurrency markets are becoming avenues for money laundering

Prime Minister Narendra Modi in his first public comment on the subject as the government works on new rules for digital currencies said, “The world’s democracies must work together on cryptocurrency to ensure it “does not end up in the wrong hand”.

PM Modi’s caution comes days after he held discussions on how to move forward on cryptocurrency in India, with concerns raised on unregulated crypto markets becoming avenues for money laundering and terror financing.

Commenting that technology and data are becoming new weapons and that democracies must cooperate in rules for data governance, the Prime Minister said: “Take cryptocurrency or Bitcoin, for example. It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth.”

PM Modi was speaking at the Sydney Dialogue, a forum on emerging, critical and cyber technologies. The government is considering a regulatory framework to manage and oversee investments made in cryptocurrency.

Manu Zacharia, Cyber Security Evangelist said, “Cryptocurrencies are more like a necessary evil. It is the future of digital currency. However, as with any technology, it is a double-edged sword. When not used in a controlled and mature manner, it can have devastating effects, both individually as well as from a national perspective. Cryptocurrencies have added a new dimension to information and financial warfare by evolving as one of the economic pillars for financial dominance. From an individual perspective; many youngsters are getting into the cryptocurrency space. A good amount of market study and analysis is always recommended to understand the risk involved and to take an appropriate decision.”

“From an individual perspective, many youngsters are getting into the cryptocurrency space. A good amount of market study and analysis is always recommended to understand the risk involved and to take an appropriate decision,” said Utkarsh Tambe, IT professional from Pune.

“I don’t understand its rationale. To me, it looks like a highly sophisticated Ponzi scheme. I hope Indian youth are able to resist the temptation,” said RTI activist Shailesh Gandhi.

Social Media Activist – Nandita Thakur said, “It seems cryptocurrency will be the future currency but with no rules and regulations, it is highly risky. The trend is Youth are the biggest investors in it, hope they are not stealing, borrowing or begging money to invest and are emotionally stronger to handle the situation arising in case of losing money.”

Harin Naik, an IT professional from Gujarat said, “Cryptocurrency used to be nerd money. Lots of early investors have made a fortune from it. Youth can be definitely vulnerable to it because it can buy anything and everything if you know where to shop for it.”

Suresh Nakhua, BJP spokesperson said, “As per latest reports more than 105 million Indians (7.9%) of the population is invested in the cryptocurrency to the tune of $10 Billion. Basically, cryptocurrency is a decentralised currency and nobody can deny its presence and influence. Indian govt is cognizant of the fact that this is an evolving tech and will keep a close eye on it and take proactive steps. The steps taken by GOI would be progressive and forward-looking, including engaging with experts and other stakeholders. The Government also feels that any attempt to mislead the youth through over-promising and non-transparent advertising has to be stopped. Unregulated crypto markets cannot be left to become avenues for money laundering and terror financing.”

Keval Domadia, a Cyber security expert from Gujarat said, “The base technology of cryptocurrency, the blockchain, and also the concept of a decentralised currency is definitely a concept of the 21st century. In fact, from economic evolution point of view, we have moved from barter to currency age, and have been doing so for over 5 centuries now. It is time to upgrade that and fill the gap of foreign exchange because the businesses have gone global. However, the implementation of a very promising BitCoin, ETH and every other crypto was wrong, it lacked global regulatory authority or a way to prove how their currency creates value. Without regulation, it is not at all a secured form of investment or a legal transaction tender. Eventually, it has turned out to be a Forex style gambling concept that thrives on marketing and pure speculation. Forex, however, returns something tangible, is recommended.”

Keval Domadia further said, “Youth is drawn towards fast money because of external validation that they keep seeking when they make role models like the Instagram influencers, who do not make any positive impact on society. The idea of “dekha jayega” has ruined the youth. The generation needs to learn more about investment, inflation and how the exchange system works, whether it is a foreign exchange or stock exchange. Block-chain crypto is not even an exchange system, it was made to be beyond this. It is simple, youth needs to be asked this question… what are you getting in return when you spend 62 thousand rupees? A block of real gold that you can readily sell or a block of numbers that you can’t even touch!”

Amandeep Singh, a farmer in the Tech domain said, “Cryptocurrency, like every other trend in technology, looks very lucrative at this time however we must keep in mind that it is not yet regulated. Indian youth should not look for and become habitual to make easy money from it.”

Ajit Hatti a cyber security expert said, “Money is the power which drives the world. Just like any other power source, money is regulated by the government and government authorized institutions. Cryptocurrencies make transactions anonymous and free from the control and regulations of government or institutions. This feature of cryptocurrency has been majorly (ab)used by bad actors, criminal syndicates to evade regulations, trace and accountability to carry out overwhelmingly large globally coordinated illegal activities. Ransomware attacks, Silk Road darknet are a few such examples. Common people in India are seeing Bitcoins and cryptocurrencies as investment avenues and assets as we have seen insane growth in the price of Bitcoins from a few pennies to 60K USD in a decade. People also see them as a reliable alternative to Swiss Bank accounts, which is not a viable option after the Indian government works out new disclosure agreements with the European countries.”

Prime Minister Modi’s comment “Cryptocurrency can spoil youth, ensure it does not end up in wrong hands: PM Narendra Modi at Sydney dialogue” if analysed pragmatically is true and a warning of a scary future. We are yet to see noble and progressive use of these currencies to call it a good for the common and large population and encourage its mass adoption. As we cannot trust authorities with absolute powers, similarly absolute and unregulated power of money can cause more harm to humanity than any real benefit,” Ajit Hatti further said.

Bhavesh Parmar a Chartered Accountant said, “Most popular investment tools in India, higher profit in short term and more crypto exchange choices are attracting youth. High volatility in crypto exchange India platforms like WazirX, coinDCX, etc get more investors to make a user-friendly app.”

RBI chief Shaktikanta Das has also warned that India needs much deeper discussions on cryptocurrencies. “When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved. I’m yet to see serious, well-informed discussions in the public space on these issues.”

The Prime Minister said the Digital Age “is changing everything around us” and has redefined politics, economy and society. “It is raising new questions on sovereignty, governance, ethics, law, rights and security. It is reshaping international competition, power and leadership.”

“But we also face new risks and new forms of conflict across diverse threats, from sea-bed to cyber to space. Technology has already become a major instrument of global competition and key to shaping the future international order,” he added further.