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Building a Responsible Cyber Society…Since 1998

Jan 18

8

Bitcoin… Of the Criminals, By the Criminals, For the Criminals

Posted by Vijayashankar Na on January 8, 2018
Posted in Cyber Law  | Tagged With: , , , , , , , , | No Comments yet, please leave one

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

Dec 17

31

Modi is yet to open his third eye on Bitcoin, the new alternative to Black Money.. Will he wake up in 2018?

Posted by Vijayashankar Na on December 31, 2017
Posted in Cyber Law  | Tagged With: , , , , , , , | No Comments yet, please leave one

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

 

Dec 17

22

Black Money gets a Boost from SEBI. Mr Thaygi should be removed as SEBI Chairman

Posted by Vijayashankar Na on December 22, 2017
Posted in Cyber Law  | Tagged With: , , , , | No Comments yet, please leave one

 

In a surprising but disgusting news report, Mr Ajay Thyagi, the Chairman of SEBI has come up with a public statement that is intended or likely to move the price of Bitcoin in the Exchanges.

Contrary to the popular opinion,  Mr Thyagi has stated

“Virtual Currencies have not posted any systemic risk to the economy”

“Government Panel is currently looking into the regulation”

Mr Thyagi was speaking at a CII summit when he made these statements. It must be remembered that Mr Thyagi represents SEBI which is the regulator who has so far failed to take any action against the Bitcoin exchanges which deal with the commodity called “bitcoin” without either the sanction from SEBI or from RBI.

By referring to Bitcoin and Virtual currencies as “Currencies”, Mr Thyagi has clearly represented them as “Currencies” which can legally be issued only by RBI. Any commodity touted as “Currency” though not recognized by RBI is just a “bit of paper” (In this case bit of electronic paper) and when value is placed on them, it is pure “Speculation”. The SEBI Chairman is fuelling such speculation and supporting Bitcoins through his irresponsible utterances. The statements can also be challenged as factual inaccuracies or clever manipulation of words that “At present Bitcoin is not a systemic risk” without saying that “In future it can be”.

For a regulator to refer to Bitcoin in a public meeting and to make a statement that Virtual Currencies have not posted any systemic risk to the economy is the height of deliberate misrepresentation to the public.

Bitcoin is an “Anonymously held value proposition” and is being used as a replacement of legit currency.

Can Mr Thyagi deny this?.. if he is put on a witness box in a Court?

If Bitcoin is a value proposition that can replace legit currency like Rupee, how can anybody differentiate it from “Black Money”?.

Mr Thyagi has by making such a statement said something to the effect “Black Money has not posed any systemic risk to the economy”.

Mr Modi and Mr Jaitely should take note of this.

This is absurd. If Mr Thyagi was not speaking from his regulatory position but as a representative of a  Bitcoin start up, his words would have sounded more honest. He needs to immediately clarify his position and in case the media has not represented him properly, he should state so.

Further by stating that the Government Panel is looking into regulation, Mr Thyagi has made it clear that a final view of how to treat Bitcoin has not yet been taken by the Government. This is fuelling the speculation that Bitcoin can still be recognized and will move the Bitcoin price upwards. In the recent days, the move of income tax authorities to ask for information from traders of Bitcoins in India had shaken the market a little and the statement of Mr Thyagi is meant to bolster the market.

It now appears that SEBI is one of the stumbling blocks in preventing action by the Government against Bitcoin. It may be recalled that Naavi.org had pointed out earlier in May 2017 that MCX which works under SEBI was indulging in “Insider Tampering” of the decision of this Government panel (Please read : Is MCX of India involved in insider tampering of the Committee on Bitcoins?.. Directors, Please answer) by posting some supporting views on the MCX letterhead when the Government had called for public opinion on Bitcoin regulation last year. At that time we had demanded an explanation from the Board of Directors of MCX. Subsequently the recommendation was taken down but SEBI did not take any action.

It is now clear that the attempt of tampering of the Panel decision by posting an opinion of MCX in the public forum had the blessings from the highest officials of SEBI.

It is now  not possible to trust SEBI with any credible regulation of Bitcoin Exchange as it has spoken against the RBI and openly supported the Bitcoin community.

SEBI Chairman’s statement  is against known fact that Bitcoin and Virtual Currencies are the “Currencies of Criminals” and is “Black Money” in virtual form whose identity is hidden by encryption so that the holder of Bitcoin cannot be identified and that It can be moved across borders like data and cannot be identified when it moves in and out of the country in the form of data and enables Indians to convert their wealth either in Indian currency or in Foreign currency to Bitcoins or other virtual currencies.

In this context, Mr Thyagi should immediately

a) Declare his holding of Bitcoins even if he wants to say that he does not hold any Bitcoins himself.

b) Resign from his position as the regulator since he has ignored the fact that there are “Exchanges” working in the country, trading in the commodity called “Bitcoin” without license from SEBI and he has failed to take punitive action.

I request Government of India to take immediate action in this regard to ensure that Mr Thyagi is replaced as SEBI Chairman.

Naavi