A new bill has been proposed by Indian lawmakers that would see owning cryptocurrencies being made completely illegal, carrying up to a 10-year sentence for possession.
The absurd proposal was announced today and would cover all mainstream crypto assets and coins including Bitcoin, Ether, Litecoin and more. Coincidentally, this proposed bill has come at a time that India is planning to launch its own state-backed cryptocurrency- the Digital Rupee- which of course would be exempt from the law.
If approved, the new rules would cover anyone involved in any aspect of the cryptocurrency ecosystem. Any individual found to be involved in mining, generating, holding, selling, transferring, disposing of, issuing, or dealing in crypto, either directly or indirectly, could face 10 years in prison. These offences would also be considered as “non bailable”, therefore very serious and needing the explicit permission of the court before any bail can be granted.
The proposed bill also states that the applicable punishment will be in direct relation to the severity of the crime and the amount of profit made from the activity. Criteria used to assess the seriousness of the crime will include the culpability of the accused, actual and intended gain made, repetitive nature of the offence, and harm caused to the system.
Each of these criteria is extremely subjective and leaves the bill and its clauses open to abuse by the courts. Even more worrying is the fact that fines levied against those found guilty will be up to three times the amount of profit that the individual made in the first place.
The bill states:
“The penalty imposed on the accused, according to the bill, shall be either thrice the loss caused to the system, or three-fold the gains made by him/her, whichever is higher. If the loss or gain can’t be reasonably determined, the maximum fine that can be imposed may be notified by the government.”
If and when the bill is passed, anyone holding cryptocurrency would have to declare it and then dispose of it within 90 days, or face prosecution.
India’s central bank has been looking into introducing a rupee-backed digital currency in order to reduce the bill associated with printing physical fiat currency. The news was first revealed back in August 2018 in a Reserve Bank of India report which suggested that a unit had already been formed to study the feasibility of the move.
The cost of printing just notes is around $90 million each year whereas using a blockchain or DLT-based system would significantly reduce costs and mitigate the risk of fraud.
Govt of india want to keep people poor, no jobs .. We are not criminal by using crypto. If they cant provide jobs, we can find way to earn money.. We have rights, we are not killing people or looting people for money , we are using our money for earn money.
— The United States Of India (@ErManoj_sharma) June 7, 2019
If approved, the bill would spell disaster for the Asian cryptocurrency market. Authorities have been cracking down with increasing severity on those operating within the sphere, during the last year, resulting in trouble for many entrepreneurs. This uncertainty resulted in the closure of a number of exchanges.
This just underlines how scared governments around the world are of cryptocurrencies. What is considered a crime is not decided by the population but by the government (not only in India but around the world). Ridiculous. #bitcoin #crypto #india https://t.co/84HPiIasWn
— Wladimir Weinbender (@Walodja1987) June 7, 2019
The reaction to the news has not been positive with some calling out the government on “trying to keep the population poor”.
The Reserve Bank of India has denied having any knowledge or involvement with the government bill and claim that they have not even received a draft copy.