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Naavi.org

Building a Responsible Cyber Society…Since 1998

We all know that Bitcoin is the popular currency of the criminals. The fact that some honest persons are gullible enough to believe that it is a “Currency” does not create a case for sympathizing with people who might have invested in Bitcoin directly or in a business related to Bitcoin.

While technically, Bitcoin is “An Electronic Document” and is recognized in India as equivalent to a “Paper Document” and the Equivalent Paper document is deemed to say….

“This is a statement that this is a part of a bitcoin issued to wallet ID…. under block chain number…… and that …..bitcoins out of this has been transferred from …..wallet ID to ……..wallet ID”,

some people consider this as “Currency” and many people promote it and deal with it as if it is “Currency”.

However, in India, since RBI is the sole authority to issue “Currency” and it has not issued Bitcoin, making any reference to it as “Currency” is a misrepresentation and an attempt to commit fraud on the society.

Today there are thousands of persons in India who are guilty of this offence and could be rightfully questioned.

However, since the Police themselves have not understood the the real nature of Bitcoin, no action has been taken to prevent frauds on the society by people who advertise Bitcoin business, conduct promotional meetings etc.

There are also many otherwise respectable persons particularly in the tech industry who consider that Bitcoin represents a revolutionary concept of “Decentralized Monetary Control” and protects their investment from inflation, and is a symbol of “Freedom from Regulatory control of personal wealth” etc…

Ultimately, all those who are championing Bitcoin are people who are fighting for their right to hold unaccounted money and ensure that Government should not tax them for the Bitcoin wealth they posses. (Some exceptions could be there to this presumption)

After the demonetization in India, the Black Money holders who are on the run, are the dearest friends of Bitcoin and we can find such friends in many political parties as well as corrupt bureaucrats and perhaps even in the Police and Judiciary.

Recently it was reported that nine rogue police officers in Gujarat, kidnapped a businessman and extorted a ransom of 200 bitcoins (Refer article here). This shows that Police at least some of them, today are aware of the potential of Bitcoin as a proxy for “Black Money” .

Since the entire Bitcoin industry revolves around “Crime”, it is to be expected that “Bitcoin Business” is managed by people who are mentally more friendly with the criminals or are criminals themselves.

I am therefore not surprised when reports emanate that some Bitcoin exchange was hacked, Bitcoin holder was defrauded etc. I donot have much sympathy for those who lose Bitcoins also.

In this background it is interesting to note that a complaint has been filed by Secure Bitcoin Traders Pvt Ltd (Coinsecure.in) by its Director Mohit Kalra that 438.31859715 bitcoins were unauthorizedly moved to a BTC address  as shown below:

The website of the company has put up a notice on its website that users may be assured that their money was safe and action is being taken with investigation authorities.

According to the notice on the website a copy of which is given here, the Company states that the CSO Dr Amitabh Saxena while extracting the coins to distribute to its customer has reported that the private keys have been lost causing the loss of BTCs.

The Company has now filed a complaint, at Delhi and the Police have registered the Complaint as indicated below.

This is not the first time that a Bitcoin Exchange has reported an attack and loss of Bitcoins from its storage.  The value of the Bitcoins reported lost in the current incident is more than 22 crores and as per the above documents, the loss may not be of the individual customers but of the Company.

The Company states that “It feels” that Dr Amitabh Saxena is making a false story and he may have a role to play in the incident.

I am not sure if Police can file an FIR and impound the Passport of the accused based on this “Feeling”. The Company needs to provide some evidence to say that MR Amitabh is the owner of the Bitcoin wallet to which the money has been transferred. Otherwise it is speculation and there could be some other internal rivalry that may be playing out in this case.

I will not be surprised if Mr Amitabh comes out with his own story in which he may reveal that the owners of the Company have many undeclared Bitcoin wallets etc. and some such differences are behind this attempt to fix him.

The ED recently conducted a survey and all the owners of the Company should have given declarations of their own transactions in Bitcoins in the past. Now ED needs to join the investigation and find out if Mr Amitabh has a story of his own to tell.

When a gang of criminals fall out amongst themselves, Police have a field day to unearth many other crimes. In this case also many more Bitcoin deals which represent anti national activities would tumble out during the investigation.

It is likely to be a very sensitive investigation which has to be immediately taken over by CBI since locating the Bitcoin wallet owner is beyond the capability of the Delhi Police.

It’s a Challenge to the Bitcoin Community also

This will also be a challenge to the Bitcoin community itself. Will they help the law enforcement authorities to investigate and unravel the “Privacy” of the Bitcoin wallet? or will they try to preserve the integrity of the Bitcoin system by sticking to the fact that Bitcoin wallet cannot be traced?

Will the “Privacy Activists” who oppose Aadhaar because it can be a Black Money prevention tool come in support of “Bitcoin” ? or remain silent? are the interesting challenges ahead.

I believe that there is a technology (however unreliable it may be) to zero in on the ownership of the anonymous Bitcoin Wallet and if the law enforcement pursues it properly with the help of honest technologists, it may be possible to find out the ownership of the wallet in question and successfully investigate the complaint.

Will it happen? … or some time during the investigations, further flow of Bitcoins to other wallets will result in its closure as “Unresolved”? …only time will tell.

Legal Perspective

While looking at the complaint that bitcoins were “Stolen” from “Company’s Bitcoin wallet”, I am reminded of the complaint in the year 2000 (before ITA 2000) when in Delhi there was a complaint about “Theft of Internet Hours”. At that time there was no ITA 2000 and what had happenned was that a person who installed the internet account for the customer gave away the password to a cyber cafe who cleaned out 100 hours of internet browsing time within a day. The user complained that “My Internet hours were stolen”. I had discussed at that time that it could be a case under “Breach of Trust” etc since it may not fit into  “Theft” under IPC since “Internet Browsing hours” is not a “Movable Property”.

A similar discussion now is relevant. The complaint is that there was an “Unauthorized Electronic Document related activity” resulting in “Wrongful loss to the company”, Suspected to be from one of the employees.

Now the way the Complaint has been lodged by the Company which I consider was not a wise thing for the company to have done rather than gulping down the loss however unpalatable it could have been. According to the complaint, it is a case of “Unauthorized Access” under Section 43 and Section 66 of ITA 2000/8. There could be Section 66C and 66D but it is not clear.

Before the crime is recognized, there has to be an “Evidence of Crime”. We need to know whether 438.31859715 bitcoins were actually available in the Wallet account and it is no longer there. Company has to prove that this wallet account belonged to the Company and it had authorization under FEMA and RBI to open the account and conduct all the transactions it did in the past in the account. This is where ED can catch the company by its scruff and ask for details of each and every transaction that occurred in the wallet and whether they were transactions that were declared in the ED survey or were concealed.

Of course this evidence has to be Section 65B certified.

Then Mr Amitabh has to be questioned on how does he normally extract BTC from the Company’s vault and distributes? … past examples…. (again to be checked and verified with the company’s IT declarations) etc…. again all to be Section 65B certified.

Next is the identity of the Wallet… Who is the Wallet service provider… Is he Indian or not?… Does he come under the jurisdiction of Section 75? … Does it require Interpol assistance for which CBI involvement is mandatory? ..

Overall it is an interesting investigation to follow. Coin Secure by filing the complaint has given an authority for the Police, CBI, Regulators like RBI and the Indian Courts to tear into the  system of Bitcoin management and expose all the nefarious things that happen in the Bitcoin industry.

But the stakes are so high, that unless there is monitoring of the case by public spirited Court and Media, the case will get buried.

Perhaps Mr Modi has to instruct Mr Rajnath Singh to take personal interest in this investigation and take it to the logical end. The Finance Ministry is suspected to have many Bitcoin sympathizers and investigation at their level may not be trustworthy.

Let us wait and watch this interesting battle.

Naavi

(P.S: Parts of the article may be unpalatable to some. Kindly excuse me. Consider that  I am just making a larger point. )

 

 

 

 

Suddenly politicians have become experts in data protection and how mobile apps may collect data without your consent. Mr Rahul Gandhi who once gave us the “Gyan” about “Jupiter Escape Velocity” is about to give us “Gyan” about “Privacy and Data Protection” and how consent should be obtained.

We have not forgotten the fact that his close aide Ms Ramya who manages RG’s twitter openly asked not long ago for Congress workers to open fake accounts and increase the social media foot print so that they could compete with Modi’s popularity on the social media. Congress also used some foreign Bots to post “Likes” and “retweets” so that the fake followers and fake re-tweets could create a “Fake News” in the social media so that every lie uttered gets magnified and is able to fool more number of dumb voters.

Unfortunately, in these efforts, RG forgets that it is his “Ivnarva” speech and “Vish….Vish…..” stumbling which is more popular in Karnataka in the social media than his more erudite utterances on Data Privacy.

Now Both Congress and BJP have started trading charges based on the privacy policies followed by both parties for their respective apps. It is funny that the spokespersons of political parties are suddenly talking like Privacy experts.

My sincere advice to them is to stop talking on this subject even if media tries to needle them. They should say that some experts are looking into whatever allegations are being made and corrective action would be taken as necessary.

The vulnerabilities of the Mobile Apps are known and even big companies have not addressed them adequately. I therefore donot expect political party apps to be more privacy compliant than the apps of the MNCs.

The Cambridge Analytica issue has become the focus of both the national and international media only because Donald Trump was connected to the incident as a beneficairy of the election campaign based on the profiling of people provided by Cambridge Analytica. The fact that the subsidiary of the same company could have been involved in managing the election campaigns of BJP, Congress and JDU in India brought the focus in India. Media would not have been interested if this was only an issue related to the privacy of the public.

What is actually disgusting is that some of the security professionals are joining hands with Rahul Gandhi and trying to spread disinformation. Some of them are even testifying against the Government in the Aadhaar issue. Perhaps they are doing it because they hate Mr Modi or because they have been bought by Congress and the Communists to defame Mr Modi.

It is disappointing to note that such professionals are also criticising the Namo App issue as if they agree with Mr Rahul Gandhi’s view that  Mr Modi is spying the Indian citizens through this App. Mr Rahul Gandhi’s intelligence level is known and no body is surprised at his utterances. But security professionals will come out as hypocrites if they donot understand that we cannot expect the PM to check the source code of the app or the privacy policy just because the App is named after him. He has to depend on technology specialists and if they have made a mistake, take suitable action.

These security professionals should also understand that the App is branded as “NaMo” because of the brand value atttached to the name of Mr Modi. It is not however the personal property of Mr Modi and must be considered as belonging to the Government. Government would have sub contracted the development and maintenance of the App and it is such an organization which is actually responsible for the Privacy policy being not followed etc.

Hence the talk of Mr Modi being responsible is incorrect and nothing different from celebrities being held accountable when the products they endorse fail.

In fact, when Congress lost power in 2014, it was guilty of deleting the Twitter handle of PMO before Mr Manmohan Singh demitted office as if he was personally the owner of the twitter handle and had to remove it when he demits office.

Now many are also criticizing the fact that the Privacy policy of NaMo app was modified after the controversy. In fact this is a matter to be appreciated that when a vulnerability was brought to the notice of the App owner, he is trying to correct it. This is the “Risk Mitigation” effort expected out of the owner. On the other hand, Congress removed its app altogether. This is also fine since this is a “Risk Avoidance” strategy and since Congress did not consider the App successful any way, it was a wise move to withdraw it.

Public should also remember that certain technical information of any app user or internet user such as the browser/mobile used etc is always tracked because this is essential for presenting the content in a proper manner. Hence processing the behaviour and preferences of the users to a certain extent is perfectly legitimate. If this back end processing is done online by a company abroad, the data may have to be sent there. In most cases this would be de-identified information and hence there is no privacy stake here. This is not “Stashing away data of Indian citizens abroad” like people stash away their black money abroad.

RG cannot understand this and hence he may say some thing like “Spying”, “Recording audio or video” etc and this has to be ignored. Even if BJP tries to pursue a defamation case, they may fail since Court may come to the conclusion that no body takes RG seriously and hence no “Defamation” can be attributed to his utterings.

But security professionals should be more responsible and not make lose comments. If they have suggestions to improve the App they should provide those suggestions.

The summary of this discussion is that while we wish that political parties are more careful in drafting the Privacy policy and Terms of use of the Apps we also wish the public should check if they want to give their consent to the sharing of their personal data before any app is installed. Beyond this, it is not correct to use terms such as “Spying” unless to exhibit one’s ignorance. It is OK for Rahul Gandhi and Ramya and not for security professionals.

Naavi

Whatever was the technological urge for Mr Satoshi in  creating the block chain technology and Bitcoin is a thing of the past. The present status of Bitcoin is as a currency of the criminals. Many of my friends may hate me for saying this but I would like to say Bitcoin today is a currency of the criminals, by the criminals and for the criminals. It is not for honest individuals. It could have been at one time..but not today.

All Bitcoin holders are not criminals… but they could be

This is not to say that all those persons who possess Bitcoins today are criminals. But Bitcoin as a commodity and used as a currency is a product meant for criminals. If honest persons want to also use it, it is their choice.

(Ed: Reminds me of a Kannada proverb: “ಈಚಲ ಮರದ ಕೆಳಗೆ ಕುಳಿತು ಮಜ್ಜಿಗೆ ಕುಡಿದಂತೆ ” meaning “Like sitting under a palm tree and drinking butter milk” )

Bitcoin is the Perfect Black Money

There is a wide support for Bitcoins in India and the support is not surprising at all considering that India is a leading country in the world when it comes to corruption and Black money.

Bitcoin is a “Perfect Black Money” because it is anonymous and transferable across the globe at the click of a button. Just as an e-mail flies across, lakhs of rupees can fly across from India to another country either to one’s own account or to somebody elses’s account.

A Bitcoin wallet which can hold multiple Bitcoin addresses or a simple Bitcoin address for a single transaction can be created as easy as signing up for an e-mail account without any KYC formalities. Money can be transferred into this wallet or address by buying Bitcoins in cash or through bank account or through cards or through western Union or Paypal. If money is transferred through Bank account then there may be a KYC and identification. But there are other means that the black money people know which can easily convert their black money into Bitcoins.

It is therefore correct to call Bitcoin as the “Perfect Black Money”.

Bitcoin is also instantly fungible into 1317 (as of Dec 31, 2017)  other crypto currencies at a click of a button and also convertible into a few legit currencies in the world.

Hence there is no doubt that many Indians including many in the Government bureaucracy and in regulatory agencies are very much in favour of Bitcoins being legally recognized so that all their ill gotten wealth can be held in the “benami numbered account” called  Bitcoin addresses or wallets. Each transaction can be in a different Bitcoin address and for much less than 1 bitcoin (1 bitcoin can be  reduced into units of bitcoins starting from a Satoshi  which is 1 bitcoin divided by 100 million).

As it is, Bitcoin addresses are anonymous since they are public keys associated with private keys of a crypto key pair and the owner holds the private key confidentially. Whoever knows the private key is the owner of the bitcoin. If one wants to transfer the bitcoin, to another, he can do so simply by transferring the bitcoin in his control to another bitcoin address or wallet whose private key is known only to the transferee.

What more do you want to call Bitcoin a “Perfect Black Money” and a darling of all those who support black money and corruption in India?

All this is being explained here not to make people knowledgeable so that they can adopt to the use of Bitcoins to hide their black money. if this happens, it would be a tragedy.

Have you been already poisoned?

But the reason I am putting out this post in public is to tell our decision makers in the Government of India including Mr Modi, Mr Amit Shah, Mr Arun Jaitely and others that when you hear some experts saying that Bitcoin is great, Block chain technology is even greater, that country and this country has legalized Bitcoins etc and try to coax you into believing that all those who are opposing Bitcoins are either technology sceptics or jealous of others who are making money etc, please donot believe them. Many of them might have already asked you to have a “Free Trial of Bitcoin technology” and created an account for you and loaded some bitcoins in your account already. Remember that this is “Poison” and if you touch it, you will be consumed by it.

If you are still not touched by this poison, please come out boldly and confirm it to the citizens of India. Otherwise we will presume that you are all already posioned with Bitcoin.

Why Bitcoin is a currency of the Criminals, By the criminals and for the Criminals?

Bitcoin was created by the criminal syndicates of the dark web who sell crime ware, viruses, conduct ransomware attacks, extort money, sell drugs and illegal arms both offline and online. They obviously donot want any central authority to know of their transactions and hence prefer to deal with Bitcoins. Mr Satoshi who remains anonymous till date could be the biggest crook of all and posing himself as a technologist created an infrastructure for criminal funding.

The entire eco system of Block chains was created to support criminal activity and along with the spread of cyber crimes, the popularity of Bitcoins and other crypto currencies as well as the underlying technology respectably called the innovative “Block Chain” grew. Blockchain is the alter ego of Bitcoins and many believe that if Block chain technology is pushed into the main stream then Bitcoins will automatically survive and grow.

Bitcoin itself is a creation of the software and there is no physical currency or backing of a reserve or a Government promise. But it is being traded at a value of Rs 13-15 lakhs per bitcoins. Now a “Derivative of the Bitcoin” is being created which is another level of imaginary “virtualization of the virtual” with a value proposition for the gullible to pick up. It is a “bubble of bubbles” in another perspective and could burst along with the Bitcoin bubble one day ..unless the world is full of people who want to live in the dream of bubbles. There are many such people around now and they are their tribe may even grow further.

We also note that already Bitcoin block chain has hard forked once and it is anticipated that a third fork is likely to form soon. What it means to the bitcoin value, only future will unveil.

Those who are promoting Bitcoins in this uncertain environment are only trying to fool others and make money. Hence the system is full of criminals.

It is therefore not surprising that Cyber Criminals in the dark web transact only with Bitcoins (or its fungible new versions like Monero or Ripple etc, which may be more secretive than Bitcoins and better for Black money holders).

Since there are only Criminals who are technologically savvy who are working around these Crypto currencies, they also indulge in ICO scams, hacking int Crypto currency exchanges, creating malwares for mining bitcoin/crypto currencies and embedding it into softwares, apps, IoT applications etc so that all of us will use our data and devices to work as slaves and mine cryptocurrencies silently for the criminals as part of the Crypto botnet.

Is Government of India unaware of this?

I would not believe that Mr Arun Jaitely or the Finance Secretary or the SEBI Chairman or the RBI Governor is unaware of the fact that Bitcoin is a “Perfect Black Money” and hence it is great for politicians and other black money holders.

But Government strangely says that “They are Observing”… Observing what?.. the speculation where 4-5 lakh members of the public have already invested in bitcoins through the exchanges? We can  note that these are innocent persons who have given their KYC and received notices.. this does not include those who have opened Bitcoin wallet account with agencies outside India including in Singapore which is developing into a hub of Bitcoin exchanges even for Indian entrepreneurs.

What the Finance Ministry is doing in being a silent supporter of speculation is absolutely unacceptable. They are deliberately not taking action to ban the use of Bitcoins. Chairman of SEBI is publicly in favour of Bitcoins. Ministry gives out conflicting statements now and then so that speculation thrives. RBI appears to be against Bitcoins but seems to have been kept silent by the Finance Ministry.

I want Mr Modi  to show his commitment to removal of Black money in India by immediately taking up a total ban on all Privately created Crypto currencies like Bitcoin, Ripple, Etherium, Monero etc…

Mr Amit Shah may kindly note

If Modi Government does not ban Bitcoins and Crypto currencies, it will appear as if the Government has developed a cold feet in its fight against Black money and corruption. It will lose the moral authority to say that they have done everything to root out Black money.

This  matter may come to haunt BJP in its next election in Karnataka where they have to explain why BJP was interested in demonetization of physical currencies only and are not willing to demonetize the crypto currencies?….

Security Issues

Apart from the issue of Black money creation, recognition of Bitcoins in India will bring in a market capitalization of over Rs 36 lakh crores of money into the floating currency in India and could completely upset the economic stability of the country.

Most of this Rs 36 lakh crores would be in the control of our enemies including China and ISI and will be used to fund terrorists in India. It will be impossible to trace the ownership and transactions of these currencies and our law enforcement persons will be looking like bakras when they have to prove “Money Trail” in Courts in corruption and criminal cases.

Criminals will go scot-free and Terrorists and Naxalites will be able to get funds easily for their operations to break India.

This is the future of India if Bitcoins are not eliminated from the Indian scenario forthwith.

History will Judge Mr Arun Jaitely

Mr Arun Jaitely will go down in history as the person who by his inaction to ban Bitcoin caused the country to collapse.

Will he or Will he not? …ban Bitcoins and all Crypto currencies…. now or when? will be the question.

Dear Finance Minsiter, Do you have a response?

Easy Way to ban Bitcoins and Crypto Currencies

If Crypto currencies are declared as “Benami Properties” since it is held in anonymous identity, dealing with them becomes illegal ab-initio.

Also ITA 2008 provides certain encryption guidelines which the Currencies violate and hence they are already not legal.

All so called Bitcoin exchanges in India are operating without either RBI or SEBI clearance whether they follow KYC or not. They are illegal operations ab-initio.

Projecting anything as a “Currency” violates the RBI Act and is punishable. Marketing of Bitcoins  as a “Currency”, is therefore illegal per se.

We only need the Government to use these existing provisions of law and these Crypto currencies can be eliminated. …

Where there is a will, there is a way. But Government appears to be only trying to find a way out for the criminals rather than punish them in the interest of the nation. Kindly prove me wrong.

Our fight against Bitcoin continues….. 

PS: It is surprising that the media and even Mr Subramanya Swamy is silent on Bitcoins. We can understand the reluctance of the media but why Mr Swamy is silent?.. We await his clarification.

Naavi

Earlier Articles

PS: It is ironic that Google Ads may be serving ads on Bitcoin on this site even as you are reading. I donot endorse those ads.

Naavi

The Year 2017 saw a big fight against Black money which started in the last months of the previous year with the “Demonetization Drive”. The move was bold and long awaited.

However, two things worked against the complete success of this move. The first was the presence of a large number of fake currency notes in the country, some of which was perhaps produced by well equipped Government presses in Pakistan. This completely foxed even the RBI which lost count of the demonetized currency returned to the Banks. The second was the dishonesty of some of the Banking employees who assisted corrupt persons in the society and exchanged notes even at the Bank and RBI level itself.

Nevertheless, though at first glance it appears that the demonetization move might not have succeeded as expected, there is no doubt that not all persons holding black money earlier in Rs 500/1000 denominations could get it converted into new currencies.  Hence in reality, black money did go down in circulation and much of the idle money held by individuals came out into the Banking system.  Many who used proxy accounts to deposit their monies are now caught in the investigation net of the tax authorities and this should result in higher tax revenue for the Government.

However, the year 2017 also saw the growth of an alternate to Black Money in the form of Bitcoins and a phenomenal growth in its international price. There is definitely a speculation that a large part of the Indian black money must have got itself converted into Bitcoins and this could be one of the reasons apart from the creation of a “Future Trade” that helped the Bitcoin rates to go up.

However, within India, the increased attention received by Bitcoins can be directly linked to the “Power of Black Money” and the related “Power of Corruption”. People who are in the forefront of corruption in India are the politicians and the bureaucrats and it is evident that they have become big supporters of Bitcoins now. The techies who created the Bitcoins and the businessmen who sensed its commercial value earlier are now the conduits for conversion of Black Money to Bitcoins and their laundering into new Bitcoin holdings of public who are being lured into the game as if Bitcoins are an investment avenue.

Recently, Business Standard carried a report on 28th December 2017 which has been reproduced below. This report raises several questions of propriety at the way the Finance Ministry is functioning when it comes to regulation of Bitcoins and indicates the possibility of corruption having been taken over the officials.  I request Mr Arun Jaitely to investigate the matter.

Firstly we note that this report filed by one Mr Shirmi Choudhary categorically states that the “Government has decided” and is “Likely to define crypto currencies and bring in a regulatory framework in the Union Budget 2018-19”.

This means that the Finance Ministry is using its power to bring a “Finance Bill” to over come the objections of RBI and give a legal recognition to Bitcoins.

Though the same ministry cautioned on the next day  by the following report, stating that “Virtual Currencies are like Ponzi Schemes”,  the report quoted above is more specific of the intentions of the Government and quotes “A Government official privy to the developments”. It also quotes that the “Expert Panel” has stated that “These currencies are as good as fiat currencies”. It goes ahead to quote the tax officials as stating that “Due to lack of clarity” the gains in Crypto currencies cannot be taxed.

It is clear that the official has revealed that the Finance Ministry is actually trying to help the Bitcoins being recognized as a “Legal Currency” which could be used instead of Rupees in transactions. Once this is done, the entire Bitcoin market capital and along with it the entire Crypto Currency market capital in the world becomes legal tender in India.

We must note that the estimated market capital of Bitcoins is US $ Rs 217 billion and the estimated market capital of all Crypto currencies is about US# 571 billion. (1 billion USD=Rs 6400 crores). The Bitcoins and other Crypto currencies are fungible and can be converted with each other with no control. Hence if Bitcoins are legalized in India, about Rs 36.54 lakh crores equivalent of Indian Rupees would come into “Currency with the Public” which includes residents and non residents and further includes criminals, terrorists, foreign Governments etc. This is perhaps twice the pre-demonetization currency stock in India, and about six times the floating currency in the country.

What will such flooding of the market with free currency mean to “Inflation”? … economists need to explain.

Since some of this holding will be with foreign countries including China, what will be the impact on our international economic stability? the Finance ministry should explain.

Since part of the holdings will come into the hands of the terrorists including ISIS and LeT, what will be impact of this on terrorism in J& K, our home ministry should explain.

Does the Secretary of the Ministry of Finance explain whether there is any possibility of legalization of Bitcoins in the next budget?. If not what do you mean by “Regulation of Virtual Currencies”?

I demand that the Finance Minister Mr Arun Jaitely has to explain to the public of India if anything is cooking up in the background and the honest Citizens will be surprised during the budget session with a decision which will favour Dishonest Citizens of India?. 

If not, how come Business Standard reporter quotes an official of the Finance Ministry on the budget provisions?

If Crypto currencies are recognized under the Finance Bill, there will be no parliamentary debate on the matter and even if it is debated, the opposition is more keen than the ruling party to have an avenue for black money and all our MPs will unanimously pass the resolution to legalize Bitcoins just as they come together for passing a raise in their salaries.

Only Kirit Somayya and Rajeev Chandrashekar would be the MPs who may like to fight against Bitcoins but they will be in complete minority.

The Finance Ministry at present does not even know how to distinguish Crypto Currencies from “Digital Currency and Virtual currency”. They refer to Bitcoin as “Virtual Currency” which itself betrays the confusion of the officials.

Some officials in ED appear to be looking only at the revenue potential of taxing the Bitcoin transactions. We need not be surprised if these officials look at legalizing drug trade and gun trade so that government revenue can be increased.

The SEBI Chairman who should have swung into imposing penal action on Bitcoin exchanges,is completely sold out to Bitcoin recognition to the extent that when MCX posted a message in the MyGOV.in site arguing for legalization of Bitcoins, no action was taken on MCX officials. Shame on them.

The Finance Ministry officials including SEBI are guilty of not taking penal action against the entities which are calling themselves “Bitcoin Exchanges”. The ED has conducted a survey and confirmed that there are more than 4 to 5 lakh perople who have done transactions in Bitcoins. If the exchange is not licensed either by RBI or SEBI and was an “Illegal Exchange”, why is RBI, ED and the Finance Ministry keeping quiet?

I suspect that many of these officials have been corrupted with “Bitcoin Gifts” and cannot be relied upon. The Government has not asked these officials to declare their Bitcoin holdings despite a call for the same. The reluctance itself tells a story of its own.

Is this not a dereliction of duty on the part of SEBI Chairman and also our honourable Minister Mr Arun Jaitely?

The time has passed for Mr Arun Jaitely to say that he is on the side of curbing black money. By not taking any action on Bitcoin exchanges and simply fuelling speculation on whether Bitcoins will be regularized or not for more than six months, Mr Jaitely has become the central figure of “Lack of Action Against Bitcoins”. Today, I may be the only person who have lost confidence on the Finance Minister. But soon there will be others…unless he acts decisively to completely shut off the speculation in Bitcoin trade by announcing the ban on Crypto currency trading in India before the budget.

The year 2017 will not go down as the year of achievement for Mr Jaitely because of GST. It will go down as an year of lack of action against Black Money by allowing the growth of Bitcoins.

I urge Mr Jaitely to clarify that my conclusion is wrong.

I therefore urge Mr Modi to open his third eye and destroy the evil called “Crypto Currency” (I refer to the privately managed crypto currencies like the Bitcoins”. If he does not wake up, all his work against Black Money will be ground to dust under the growth of Bitcon usage in commercial transactions.

This is what I look forward to in 2018.

Naavi

 

On 27th, November 2017, a talk had been arranged by the Federation of Karnataka Chambers of Commerce, in the FKCCI building, K.G.Road, Bangalore. The gathering consisting mainly of members of the chamber was addressed by Mr Satvik Vishwanathan, CEO of Unocoin.com, one of the early entrants into the Bitcoin trading in India. He made an excellent presentation on why Bitcoin is a great investment. As could be expected, the talk focused on how Bitcoin price has grown by 9000% in the last few years and how it is a good substitute for fiat currency holding etc.

Many in the audience were perhaps impressed and decided that part of their export sales should be collected in Bitcoins.

After the meeting, promotional vouchers of Rs 500/- were distributed free to all the participants as seed money in the form of “Bitcoins” if they register in the Unocoin.com website.

There was a brief discussion at the end of the talk in which the undersigned cautioned the participants that until RBI and SEBI approve legitimacy of the Bitcoin, investment should not be considered. Some aspects such as the possible use of Bitcoins for Black Money hoarding was also briefly pointed out by some members.

However, the event itself being held in the FKCCI building under the patronage of the Chamber , and the recent two page ad in Sunday Express, indicate that the Promotion of Bitcoins is going unabated while the RBI and the Government is dithering and not coming out with a decision to ban crypto currencies.

Many in the audience were perhaps sold on the dream of Bitcoin soaring to the Moon/Mars faster than NASA’s rockets. The meeting was therefore successful in its objective of promoting Bitcoins as an investment and as an alternative to currency. Mention was also made about some entities in Bangalore receiving Bitcoin as a payment for goods and services as if the practice is welcome.

Will the  dreams of a Bitcoin investment soaring to the skies be a reality? only time will tell. But if people invest their hard earned money and lose, all responsible persons particularly in the regulatory structure in the country should take responsibility.

One of the participants mentioned that when a Malaysian Company made a marketing tour of India and sold the concept of investing in their Gold Coins, many lost money and about 56 persons committed suicide. I recalled that when that meeting was held in Chennai, I had shot off a letter to the DGP there predicting that it would be a scam one day. Ofcourse, DGP did not heed to the caution and investments were made by many. Similarly, today we are looking at another dream called Bitcoin and perhaps one more set of suicides in the coming days.

The RBI Governor and Mr Arun Jaitely will perhaps wake up when there is some major calamity that will result in a number of people losing their investment in Bitcoins. Until then, the dream of a $10000 value per Bitcoin will be attracting greedy people like moths take to light.

On our part, it is a fair speculation that some of the decision makers in the Government are sold out to Bitcoin industry because it represents the cumulative strength of all the black money which Mr Modi wanted to remove from the system. The Politicians, Criminals as well as Business men and IT evaders have all got vested interests in ensuring continuation of Bitcoins in use and are happy with the RBI not coming up with a ban but continuing to make ridiculous statement that “They are observing”.

It is depressing to note that Corruption is showing its strength and even Mr Modi is unable to kill Bitcoin which is the alter ego of Black money.

Hope Mr Modi will wake up from his slumber atleast after the Gujarat elections and talk about demonetization of crypto currencies in his next Man Ki Bat.

Naavi