Major Influencer in Anti-Bitcoin Case in India Calls Crypto a Ponzi Scheme (Doesn’t Imply Bitcoin Is)

The Reserve Bank of India is due to finally conclude a case that will finally determine how cryptocurrency will be used within the country. However, Anurag Agarwal of the Ministry of Corporate Affairs could have a major influence – will he use that power towards the good of the crypto industry?

  • Anurag Agarwal states that Bitcoin and all other cryptocurrencies are a Ponzi scheme.
  • RBI will make a decision on crypto regulations in July 2019.

Bitcoin came in to the world as a solution for the major recession that the market was facing at the time. Since then, it has created quite a rally, as more proponents pledge loyal to an endeavor that they hope will decentralize currently as a whole. However, that is not how the entire world sees it. Some people, like Anurag Agarwal, has called cryptocurrencies a Ponzi scheme, adding that they should be banned as a way to protect the public.

Agarwal, who is the joint secretary for the Ministry of Corporate Affairs in India, said that Bitcoin makes it easier for scammers to commit financial fraud within the country. Perhaps that is the reason that the authorities have been taking an aggressive stance against Bitcoin in India, as rumors spread about an anti-Bitcoin bill slowly becoming a reality.

The joint secretary is a busy man, also being CEO of Investor Education and Protection Fund. The fund is a government-based organization that upholds the rights of investors, for while he was appointed by government officials.

During Agarwal’s time with the organization, he has been a witness to numerous investigations involving potential fraud against investors. With the upcoming Supreme Court case, Agarwal could be a major influence on the legalization or ban of cryptocurrencies.

At this point, the trading of any cryptocurrency (including Bitcoin) is illegal, based on the recent information made public by the Reserve Bank of India (RBI) in 2018. It does not look like the local agree at all, considering that they sued the central bank, saying that they are taking a directly opposite approach to a booming industry that is succeeding everywhere else.

The Supreme Court of India has had the case since July last year, though the next hearing is planned for two months from now, bringing the case to a close.

Sources involved with the India-based Economic Times news media service said that there’s already interministerial consultations happening within the government, regarding the anti-bitcoin efforts. The draft, which is being called the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019,” has seen the support of the IEPFA, the Department of Economic Affairs (DEA), the Central Board of Indirect Taxes and Customs (CBIC), and the Central Board of Direct Taxes.

As the Supreme Court Hearing allows the government to create a draft of the new regulations, the opposition will have an opportunity to change whats on the document. Specifically, they will be able to change the part of the draft that specifically says that Bitcoin should be compared with a Ponzi scheme.

If the Bitcoin opponents are basing their accusations off of the classic definition, then a Ponzi scheme is a:

“fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.”

Even though it looks like Bitcoin somewhat corresponds with half of this definition, the returns that it comes with are based on a higher adoption rate. Still, no operator is needed at all.

A typical Ponzi scheme typically does not have an effective use case, which is one way that Bitcoin proves that it is not one. With smaller fees than PayPal and decentralization throughout the industry, Bitcoin will hopefully find its way into the Indian economy in time for locals to see its full benefits. However, almost being a Ponzi scheme might be enough to keep it out.

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