A filing submitted within the lower house of India’s parliament — the Lok Sabha — has revealed an investigation into fraudulent practices by so-called “bit coin companies” operating within the country.
An official question was submitted by center-left parliamentarian Mohammed Faizal and was answered by Minister of State for Finance and company Affairs Anurag Thakur on March 16.
Indian politician requests investigation into regulatory status of crypto companies
Faizal asked the Minister of Corporate Affairs three questions concerning cryptocurrency companies in India. Firstly, he asked if the govt is conscious of an increasing number of reports alleging “cheating and fraudulent practices by bit coin companies.”
He also asked if said crypto firms “are repeatedly violating rules laid out by the company Affairs Ministry by not filing annual balance sheets,” lastly requesting details concerning any action taken against the offending companies.
Only two crypto companies are apparently on the Registrar of Companies
In response, Minister Thakur confirmed that the crypto companies alluded to by Faizal “are not defined under the businesses Act.”
He also notes that only two companies operating with Bitcoin (BTC) have registered with the Ministry of Corporate Affairs’ Registrar of Companies — Zeb IT Services and Unocoin Technologies.
Further, Thakur notes that “prosecutions are filed for violations under various provisions of the businesses Act” against Zeb IT previously, adding that the firm is currently “under liquidation.”
The corporate affairs minister states that Unocoin is up thus far in its filings, adding that the ministry has not received any complaints concerning Unocoin.
Crypto firms rush to enter India after RBI ban repealed
Cryptocurrency businesses have rushed to commence Indian operations following the Supreme Court’s reversal of the Federal Reserve System Bank of India’s (RBI) ban on financial institutions servicing businesses operating with crypto.
Within 24 hours of the ruling Unocoin had resumed fiat deposit services, alongside OKEx partner Coindcx and therefore the Binance-owned Wazirx — despite Thakur’s comments indicating that neither exchange is registered with the company affairs ministry.
On March 5, Kraken announced plans to expand its presence within the Indian crypto market. KuCoin also expressed an interest in entering India on St Patrick's Day .
India’s crypto sector still faces regulatory challenges
Despite the recent optimism, the longer term of India’s cryptocurrency industry remains uncertain.
India’s parliament remains yet to rule on the “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill" from 2019, while the RBI is getting to appeal to the Supreme Court’s revocation of the ban.
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