Police in the Indian state of Jammu and Kashmir has reportedly warned the public not to invest in cryptocurrencies like bitcoin over the “heightened risk” associated with such investments, as cryptos aren’t backed by the country’s government.
According to local news outlet Business Standard, an advisory issued by the inspector general of the police’s crime branch noted cryptocurrency investments can result “in a sudden and prolonged crash” that can see investors lose their money.
The advisory reportedly reads:
The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies (vcs) such as bitcoin because there is a real and heightened risk associated with them.
Per the document, the public needs to “be alert to avoid getting trapped in such fraudulent schemes,” the news outlet reports. The risk, it implies, comes from cryptocurrencies not being backed by a central financial institution.
The advisory further added that India’s central bank, the Reserve Bank of India (RBI), hasn’t authorized any organization to operate with cryptocurrencies, which means these “o not have any regulatory permission or protection in India.”
As CryptoGlobe covered, the RBI has, in fact, last year issued a circular that ordered commercial banks in the country to stop dealing with cryptocurrency-related firms. This took its toll on this industry, and ultimately saw Zebpay, a leading exchange at the time, shut down.
At the time the cryptocurrency community fought back, and saw the supreme court issued a missive that upheld the RBI’s decision. Later on, in October, the supreme court asked the government to clarify its stance on cryptocurrencies.
The RBI itself was reportedly looking into launching a central bank digital currency (CBDC), but has reportedly shelved plans to do so this year, while planning on keeping an eye on the industry.
The police’s recent advisory, per the Business Standard, further added that all cryptocurrency transactions are encrypted, and as such there’s “high risk” in using them as these are “used for carrying out subversive activities, smuggling, drug trafficking, human trafficking, terror funding and money laundering.”