Lok Sabha Question No. 2312 (UNSTARRED), answered on 2019-07-08
Subject: Agency for Forgery and Frauds
Ministry: CORPORATE AFFAIRS
Asked by: Dharambir Singh

## GOVERNMENT OF INDIA LOK SABHA

## ANSWERED ON MONDAY, THE 8 th  JULY, 2019/ ASHAD A 17 , 194 1 (SAKA)

## MINISTRY OF CORPORATE AFFAIRS UNSTARRED QUESTION NO.  2312 H

## AGENCY FOR FORGERY AND FRAUDS QUESTION

2312: SHRI DHARAMBIR SINGH:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कॉर्पोरे ट कार्य मंत्री

- (a)  whether  the  Government  has  set  up  any  agency  for  providing information related to the incidents of forgery and fraud committed by the fast mushrooming bitcoin companies in the country;
- (b) if so, the number of persons against whom action has been taken so far, State/UT-wise ; and
- (c) the total value of money that have been duped of by these bitcoin
- companies during the last 3 years?

## ANSWER

FOR FINANCE

THE MINISTER OF STATE

AND CORPORATE AFFAIRS

वित्त एिं कॉर्पोरे ट कार्य मंत्रालर् में राज्य मंत्री

SHRI ANURAG SINGH THAKUR ) ( )

श्री अनुराग व ंह ठाक ु र

- (a)  to  (c):  The  Government has not recognised crypto currencies such as  bitcoins  as  legal  tender.  The  issue  of  permitting  trading  in  crypto currencies is currently under examination by the Government which has constituted an Inter-Ministerial Committee (IMC) under the Chairmanship  of Secretary, Department  of Economic  Affairs with representatives  from  concerned  Departments  to  study  all  aspects  of crypto currencies and crypto-assets including Bitcoin. The Committee, with  representation  from  MeitY,  RBI,  SEBI  and  CBDT  is  examining  all issues,  including  the  pros  and  cons  of  the  introduction  of  an  official digital  currency  in  India  and  is  working  to  develop  a  framework  for regulating cryptocurrencies. However, in absence of a globally acceptable solution and the need to devise technically feasible solution, the Department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations. No decision on licensing and authorising any entity or  company  to  operate  such  schemes  or  deal  with  Bitcoins  or  any virtual currency has been made as yet.

(

The  Government  and  the  RBI  has  been  warning  the  users  of crypto-currencies  of  the  dangers  posed  by  such  virtual  currencies. Government vide press release dated 29/12/2017 clarified that Virtual Currencies/Crypto Currencies are not legal tender and cautioned the members  of  public  against  the  Risks  involved  in  investing  Crypto Currencies. RBI vide press releases dated  24th Dec, 2013, 01st Feb, 2017 and 05th Dec, 2017 cautioned the public about risks and dangers with Virtual currencies including potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/or other Virtual currencies. RBI has also clarified that it has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoins or any virtual currency. Further, Department of Financial Services, MOF, has  informed  that  as  per  Reserve  Bank  of  India's  Notification  dated 06.04.2018 on 'Prohibition on dealing in Virtual Currencies', RBI has cautioned  users,  holders  and  traders  of  virtual  currencies,  including Bitcoins regarding various risks associated in dealing with such virtual currencies and RBI has directed that in view of the associated risks, with  immediate  effect,  entities  regulated  by  the  Reserve  Bank  shall not deal in VCs or provide services for facilitating any person or entity in  dealing  with  or  setting  VCs  and  that  regulated  entities  which already provide such services shall exit the relationship.  Accordingly, this ban came into force w.e.f. 6th July, 2018.

In the case of one company, namely M/s ZEB IT Services Private Limited, Inspection of books of accounts u/s 206(5) of the Companies Act,  2013  to  examine  inter  alia  the  aspect  of  dealing  in  Bitcoin  was conducted  and  during  Inspection  action  has  been  taken  for  noncompliance of various provisions of Companies Act.

It is informed by Ministry of Home Affairs that 'Police' and 'Public' are  State  subjects  as  per  the  Constitution  of  India  and  States  are primarily  responsible  for  prevention,  detection  and  investigation  of crimes through their law enforcement machinery. The Law Enforcement  Agencies  take  legal  action  as  per  provisions  of  law against  the  cyber  fraud  offenders.  Steps  have  also  been  taken  to spread awareness  about  such  frauds, issue of alerts/advisories, training of law, enforcement agencies, etc. to prevent such frauds and to speed up investigation.

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