The crypto dilemma stems from concerns about an unregulated currency having a destabilizing effect on the country. , Photo credit: Getty Images/iStockphoto
the story So Far:
Investor Education and Protection Fund (IEPF) will soon launch an outreach program to create awareness cryptocurrency and online gaming. The need for outreach is based on the observation that both crypto-assets and online gaming (which extends to gambling and betting) are still being promoted in a risky way, despite recent upheavals in the sector.
What is Investor Education and Protection Fund (IEPF)?
The Investor Education and Protection Fund (IEPF) is managed by the IEPF Authority, which was established in 2016 under the provisions of section 125 of the Companies Act, 2013. The Authority is entrusted with the responsibility of administering the IEPF, which, apart from promoting awareness among investors, refunds shares, unclaimed dividends, matured deposits and debentures etc. to the rightful claimants.
As far as investment education is concerned, the idea is to reach out to home investors, housewives and professionals alike in rural and urban areas and teach them the basics. Focus areas include primary and secondary capital markets, various savings instruments, investment instruments (such as mutual funds, equities, among others), creating awareness among investors about dubious Ponzi and chit fund schemes and existing grievance redressal mechanisms, among other things. Is. By the end of October, it had conducted over 65,000 awareness programs covering 3 million citizens.
Why worry about cryptocurrencies?
The crypto dilemma stems from concerns about an unregulated currency having destabilizing effects on a country’s monetary and fiscal stability.
Furthermore, crypto exchanges in India are being investigated for their alleged involvement in illegal practices such as drug trafficking, money laundering, violation of foreign exchange laws, and GST evasion. As of 14 December, proceeds of crime amounting to ₹907.48 crore have been attached/seized, three persons arrested and four prosecution complaints filed before the Special Court, Prevention of Money Laundering Act (PMLA).
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The Reserve Bank of India (RBI) has recommended legislation on this area. He believes that cryptocurrencies should be banned. In a written reply in the Lok Sabha recently, Minister of State for Finance Pankaj Chowdhary said that crypto assets are borderless by definition and therefore, any legislation (for regulation or ban) would require international cooperation to prevent regulatory arbitrage. . Collaboration should include an assessment of risks and benefits and the development of common classifications and standards.
Will an outreach program help?
Vipul Kharbanda, non-resident fellow at the Center for Internet and Society (CIS), while supporting the move, points to two concerns: First, apart from the outreach programme, there should be a regulatory mechanism for the crypto sector. Second, he says the message has to be right. “If the government takes a hard line and starts saying things like virtual currency are not legal in India, it will not be entirely true. People may wrongly believe that it is illegal,” he says. Indulge in illegal transactions like money laundering by using .But illegal transactions can also be carried out by using legal banking channels.
Rajagopal Menon, vice-chairman of crypto-exchange WazirX, also welcomed the move. “Cryptocurrency investing can be a complex and risky endeavor because the category is extremely volatile and operates around the clock. It is important for potential investors to thoroughly educate themselves before making any decisions.”
As to the allegations, Mr. Menon told The Hindu, “The immutable, public nature of blockchain makes crypto a poor choice for money laundering because it allows law enforcement to uncover and detect money laundering far more easily than cash transactions.” allows tracing.
What about online gaming?
The Ministry of Electronics and Information Technology (MeitY) has been appointed the nodal industry for online gaming in India; For e-sports, the nodal agency is the Department of Sports under the Ministry of Youth Affairs and Sports. A proposed framework for central regulation by MeitY is expected to address the issues faced by the sector.
For example, there is confusion about the definitions of fantasy games such as ‘game of chance’ and ‘game of skill’, a term used in the Public Gaming Act (1867) but not explained Is. There are also risks from cybercrime.
Khushboo Jain, a Supreme Court lawyer and founding partner of law firm Arc Legal, told The Hindu that in ‘games of skill’, while the element of chance cannot be completely ruled out, it is the ‘element of skill’ that ‘ is (mental or mental). physical skill of the user) that plays a major role in determining the outcome of the game rather than pure chance. He pointed out that “a perusal of the judgments of the Supreme Court and several High Courts clearly establish ‘games of skill’ as legitimate commercial activities protected under Article 19(1)(g) of the Constitution of India. These judgments has also emphasized a clear distinction between ‘games of skill’ and ‘games of chance.’ Despite these court rulings, online skill games are banned in some states due to addiction, financial loss, and the thin line between skill and opportunity. have faced sanctions.”
From an industry perspective, Roland Landers, CEO of industry body All India Gaming Federation (AIGF), welcomed the move. “The online gaming industry has become increasingly concerned about the threat of offshore illegal gambling websites offering their services and mass advertising to innocent Indian users, often masquerading as legitimate gaming platforms.” He said that it is becoming increasingly difficult to differentiate between good and bad operators.