Crypto Investment Warning Issued By India’s J&K State Police

News, Regulation | January 3, 2019 By:

Authorities in the Indian state of Jammu and Kashmir (J&K) have warned its citizens against cryptocurrency investments.

In an advisory posted on its website, the J&K police warned the public not to make investments in bitcoin and other cryptocurrencies due to the “heightened risk” associated with them. According to the advisory, cryptocurrencies are not backed as legal tender by the government and central financial institutions.

“The general public is informed, not to make any type of investment in crypto – currencies/ virtual currencies (vcs) because there is a real and heightened risk associated with them,” the advisory said. “This can result in a sudden and prolonged crash, exposing investors, especially retail consumers who stand to loose their hard-earned money. The public needs to be alert and extremely cautious to avoid getting trapped in such fraudulent schemes.”

The advisory further stated the Reserve Bank of India (RBI), the country’s central bank, has not given any license and authorization to any entity to operate in schemes related to cryptocurrencies.

“Cryptocurrencies do not have any regulatory permission or protection in India,” the advisory said. “As there is no regulatory oversight on cryptocurrencies, all the transactions are encrypted and there is high ended risk as this platform is used for carrying out subversive activities, smuggling, drug trafficking, human trafficking, terror funding and money laundering activities.”

In April 2018, the RBI enforced a cryptocurrency ban which had directed all banks to extract themselves from existing relationships with crypto exchanges and traders. Local crypto firms later challenged this decision in court claiming that it was founded on a lack of understanding of the underlying technology.