Indian police warn of rise in cryptocurrency fraud

The Hyderabad Police Commissioner (capital of Telangana) Shikha Goel, IPS, warned Indian citizens about the rise in cybercrime and urged investing in digital assets only through reputable companies.

Do not transfer your cryptocurrency to unauthorised private wallets
Dont fall prey to fraudsters #BeCyberSmart pic.twitter.com/eJOwsnLSmX

— Shikha Goel, IPS (@Shikhagoel_IPS) December 26, 2021

Goel noted that most fraud cases relate to investments and trading in cryptocurrencies.

She also spoke of 16 recorded incidents of digital asset theft following the disclosure of a private key to a crypto wallet. According to her, because of the nature of blockchain technology, victims will not be able to recover the stolen funds.

In 2018 the Reserve Bank of India (RBI) prohibited supervised institutions from conducting operations with digital assets. In March 2020 the Supreme Court of the country overturned the RBI directive. However, large banks chose to wait for guidance from the regulator and delayed resuming services to trading platforms.

At the end of 2020, media reported that leading financial institutions in India resumed operations with cryptocurrency exchanges and traders. In May 2021 the central bank confirmed that there are no further restrictions.

In spring 2021 it emerged that the RBI was applying pressure on banks, urging them to reassess their relationships with Bitcoin exchanges and traders. According to some reports, a number of financial institutions allegedly warned clients against using digital assets and pointed to the cancelled directive. Later the regulator asked banks not to do this.

According to The Economic Times’ sources, the government will ban using digital assets for payments, but will allow trading and holding them, like stocks, gold or bonds.

In December, unknown attackers hacked the personal Twitter account of Indian Prime Minister Narendra Modi and announced on his behalf the legalization of Bitcoin in the country.

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