Why the IT raids on Bitcoin exchanges in India are crucial

On Wednesday, the Income Tax department conducted a series of raids on Bitcoin exchanges around the country. Raids were conducted at Delhi, Bengaluru, Hyderabad, Kochi and Gurugram.

An IT official informed that the survey was conducted to establish the identity of traders, investors and also the transactions undertaken by them. The IT department is closely watching the market as the cost of a Bitcoin has jumped from Rs 23,000 to Rs 10 lakh after demonetisation.

The Wednesday raid was the first big action by the IT department where Bitcoin exchanges were concerned. With trading in Bitcoins increasing, the IT department is now finding out more about the functioning of these exchanges.

The virtual currency is not regulated in the country. Many bankers across the world have raised concerns about its circulation. The RBI says that Bitcoins are a commodity and not a currency. It needs to be regulated accordingly, the RBI says while also cautioning users, holders and traders.

The big worry is that e-wallets are extremely hard to trace. An Intelligence Bureau report also suggested that terrorists and underworld kingpins such as Dawood Ibrahim have already moved on to Bitcoins. Dawood, in fact, has purchased Bitcoins to the tune of almost Rs 90 crore the report also stated.

Recent investigations conducted by the Delhi police pointed to an extortion racket in which Bitcoins were being used. The IB also says that there are instances of political funding taking place through Bitcoins.

OneIndia News