The crypto world was left reeling following the proposed bill in India, which would ban the industry altogether in the nation, with the prospect of ten years in prison for citizens who took part in any related businesses.
Whether the news was set to be a reality is up to debate, yet what it did reveal was the mounting figures who were sternly against the cryptocurrency industry in India, the second most populous nation in the world.
So, what might have made these people in the government and society feel so strongly against the Bitcoin industry?
The scams tarnishing the crypto reputation
Scams have long been a stain on the industry and it seems that India has had its fair share of crypto-related crimes in the past. The latest was the call center scam which took thousands of bitcoins from unsuspecting US citizens.
Yet the scam which is most well known in India is the Bitconnect Ponzi scheme. This is because one of the main culprits was Indian man, Divyesh Darji, who alongside Satish Kumbhan was behind the Bitconnect scam which left many out of pocket. Bitconnect collapsed from a high point of $500 to just below $1 in January of 2018, in an infamous scam.
Darji’s crimes did not stop there, with his second scam, Regalcoin also duping many in India and abroad. The Regalcoin scam, much like Bitconnect, made huge promises, telling investors they would make a 5,000 percent return on investments. However, it soon became clear that this was yet another lie. Just this month Darji escaped authorities after posting bail and then went on the run for the crimes he committed in the Regalcoin scam and is wanted in Gujarat India.
These international news headlines about an Indian national committing million dollars worth of fraud will no doubt have brought shame on to India and prompted the politicians behind the proposed bill to have such a hardline. In fact, The Indian government explicitly said their main reason for banning the digital currency industry was because it was being used for criminal acts.
The Bitcoin trader’s suicide
The negative headlines around Bitcoin are seemingly endless within the nation’s national news sites. A simple search reveals a swathe of unflattering articles.
One story that has caught the attention of many in India, is that of Bharat Patel, an Indian Bitcoin trader who was found hanging from his ceiling at home having committed suicide in May of this year.
In his suicide note, Patel, who was living in Ahmedabad at the time, claimed he was frightened for his life and pointed to a senior police officer and the cops brother for threatening him after a cryptocurrency investment had gone wrong.
Patel, according to the Indian news site, NDTV, claimed Deputy Superintendent of Police (DySP) Chirag Savani and his elder brother Haresh Savani of putting pressure on him over losses they suffered in bitcoin trading, with 11,575 bitcoins being bought and five lost.
Patel’s suicide note read:
“There is a huge pressure on me and my brother. I am very disturbed due to bitcoin recovery. Chirag Savani visited my house and threatened me to pay him back the entire bitcoin. I am compelled to commit suicide. And the pressure of the two brothers is responsible for my suicide. My family members have nothing to do with this and they are innocent,” a police officer quoted the note as saying.
The situation does not look good for the police in the state and brings even more negative connotations toward bitcoin and the industry. The unfortunate incident will only serve to paint bitcoin as a bad thing and something to be avoided.
Overall, it seems that all the negative press has scared some of the powers at be. The tragic suicide and police involvement does not look good and although Bitcoin was not at fault, it all feeds into the narrative that crypto is bad. Not only that but, having an Indian national at the head of some of the most infamous crypto scams is a very bad look. The cryptocurrency ban is wrong and stifles the development of much of India, yet it is easy to see why many have come to this decision. Let’s hope this bill does not happen and some more positive stories come to light in India about this great industry we love.