IAMAI the Internet and Mobile Association of India is a body registered under the Societies Act with a self declared mandate to expand and enhance the online and mobile value added services sectors. Considering the growth of the mobile industry in India and its reach among the common people. IAMAI represents a very important segment of the communications industry. It therefore holds a very important obligation to the people of India.
While promotion of the commercial interests of the members is a legitimate activity of the association, I would like to ask the Governing Council members to take a fresh look at their objectives and whether the objectives include promotion of commercial interests irrespective of the impact of their decisions on the society at large.
In short we need to question if the objectives to promote business includes promotion of “Ethical and Legal Business” and not business that is detrimental to the very survival of the India as a sovereign country. ( This is no reflection on many good causes for which IAMAI might have devoted its energies in the past.)
There are may actions of the IAMAI such as its opposition to Data Localization that has betrayed the lack of national interest in the pursuance of its objectives but I would like to focus now on the specific stand that IAMAI has taken to support the legitimization of Crypto Currencies in India and oppose the stand of RBI in banning the Bankers involvement in the Crypto exchanges.
In the petition being heard in the Supreme Court IAMAI has taken a stand to oppose the RBI ban on Crypto transactions.
The IAMAI counsel has argued
“RBI restricting banks from providing services to crypto [businesses] is a colorable exercise in the guise of consumer interest. It can exercise power in public interest only to the extent as provided under law such as interest of depositors, borrowers etc,
“cryptocurrency must not be equated to sovereign currency i.e., rupee etc,”
“RBI is only a delegatee of power which cannot exercise [the] same powers as Parliament which has a direct impact on legitimate businesses,”
“since Blockchain technology” is not disputed, the blanket ban on Virtual currencies built on this technology is “arbitrary, unfair and unconstitutional”.
The counsel has also showed that certain businesses have suffered losses or closed down their businesses because of the RBI ban and therefore drawn attention to Article 19(1) of the constitution.
We draw the attention of the honourable Supreme Court to the counter views that it must consider before taking any view on these arguments.
- Bitcoin and other private crypto currencies form one set of mutually interchangeable assets. Hence a holder of one of the currencies can convert it to anther. Some of these currencies are convertible to legacy currencies such as Swiss Francs and Japanese yens. There are ATMs operating in several places abroad where cryptocurrencies can be deposited or withdrawn against legit currencies. Hence any holding of a crypto currency is equivalent to the holding of foreign currency and violates the FEMA regulations.
- Crypto currencies are called “Currencies” because they are dealt with as “Currencies”. They are not dealt with in the market as “Commodities”. Hence the only discussion that is relevant is for “Crypto” as a “Currency” and not as a “Commodity”.
- In actual usage Cryptos are used as “Currency of the criminals” and “Currency of terrorists”. More than 90% of the Cryptos like Bitcoins are in the past used for financing some illegal drug activity or arms trading or for collecting ransom and hence most of the current stock if considered as “commodity” is tainted as “used in money laundering”.
- Cryptos arise out of three channels namely the “Mining”, “Trading” and “ICOs”. Mining is an activity which consumes huge quantities of resources in terms of power and computing resources and will encourage unproductive use, crypto mining offences etc. Trading will enable the currencies to be used for money laundering. ICOs are a fraud since it is like a private placement of a self created wealth. As long as the identity of Bitcoin wallet owners and Bit coin transactions remain anonymous, we have to treat the holdings of Cryptos as “Digital Black Money”.
- If Supreme Court is even thinking of legitimizing private cryptos, it would mean that the Court has gone back on its commitment to root out black money.
IAMAI should refrain from promoting business that supports “Digital Black Money” and “Money laundering” however beneficial it is, to its members. If some of these Crypto exchange companies close down, it is a natural consequence of pursuing the business of money laundering. It cannot be a fundamental right that the Court should protect.
I request members of IAMAI to discuss whether the organisation has to involve itself in promoting Crypto currencies as it amounts to promoting unethical business.