India probes unregulated bitcoin exchanges
The Income Tax Department, the tax authority of India, started a probe into the transactions made at various illegal bitcoin exchanges. The announcement was made about a week after the Central Bank of India warned users about the potential risks associated to bitcoin and other cryptocurrencies.
The investigators will visit and look into cryptocurrency exchanges across the country, including some of the biggest cities in India. However, the Income Tax Department did not reveal if it has some indications that the exchanges were linked to tax evasion or money laundering. The department refused to make any such statements, as the investigation is ongoing.
India's Central Bank warned about bitcoin's risks
India's Central Bank surely does not seem to be a fan of bitcoin. In fact, the central bank in the country has issued a third strong warning about bitcoin at the beginning of the month. The issuance followed a similar warning from China. The two countries pointed out to the risks of investing in cryptocurrencies and initial coin offerings.
Digital currencies do not have a legal status in India, but investors have started to show a lot of interest in such currencies in this country. Many investors see bitcoin as a real alternative to traditional currencies or gold, and a way to store value.
Local media outlets reported that the purpose of the Indian authorities' visits is to gather evidence to determine the identity of the investors and traders in cryptocurrencies. The authorities will look into their transactions, as well as bank accounts.
Several reports also indicated that Indian authorities are looking into taking an official stand on digital currencies. Allegedly, the federal government created a panel, including the Economic Affairs Secretary and the Securities and Exchange Board members, with the main purpose to decide on this matter. No other details were available for the moment.