Coindesk India has filed a right of Information request, which has revealed that the Investor Education and Protection Fund (IEPF) Authority wishes to ban cryptocurrencies.
The response is the first outward and definitive response from any government authority on the issue of the proposed crypto ban bill, which put forward a ten year sentence for those caught.
According to Coindesk India, the IEPF, in its reply stated:
“In (an inter-departmental committee) meeting held on Jan 24, 2019 the IEPF authority with DEA, CBDT, CBIC and MCA, unanimously decided “Department of Revenue and Department of Economic Affairs may immediately take steps to completely ban sale, purchase and issuance of all forms and types of cryptocurrencies”.”
The RTI response also alluded to the reasoning behind their decision to recommend the ban on cryptocurrencies and the industry within the nation of India. The IEPF response claimed that the members of the meeting, “discussed that it (Cryptocurrencies) has features of Ponzi Scheme”, no doubt in response to the shame of previous scams done by Indians in the nation.
However, the IEPF failed to answer all of the questions posed to them, citing section 2(f) of the RTI Act, 2005 to, “avoid answering the rest.”
IEPF proposes to allow holding of cryptocurrencies
The “Banning of Cryptocurrency and Regulation of Official Draft 2019”, proposed the imprisonment of those who “mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies”.
However, the response to the RTI stated that their request is to prohibit the “sale, purchase and issuance” of cryptocurrencies. This means that potentially the holding of Bitcoin and other cryptocurrencies may be allowed.
Another main element of the reports arising from the proposed bill, is the lack of involvement from the Reserve Bank of India, something which the IEFA confirmed in the response. The Securities and Exchange Board of India (SEBI) was also not consulted.
Is there hope for the Indian crypto community?
The SEBI was a part of the panel set up by Government in December 2017 headed by the Secretary, DEA, and Finance Secretary Subhash Chandra Garg to look at crypto regulations. However, with them now not consulted along with the Reserve Bank of India, shows a clear lack of cohesion and would certainly limit the feasibility of the bill, something which has been called into question.
The lack of cohesion is one issue, but it would appear the Supreme Court decision on the Reserve Banks crypto ban is another major one. The hearing is set for July 23, 2019, where the exchanges and individuals have appealed against the RBI Diktat.
Another possible savior for the ban is the upcoming G20 summit. Japan has a strong love affair with crypto and is a leading figure in the continent and the world for regulations. The nation’s representatives will give a talk and the crypto community will be hoping fellow G20 member India will listen carefully and take notes.