Indian Finance Ministry calls Cryptocurrencies as ‘Ponzi Schemes’

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Cryptocurrency News

The Indian government is increasing its sarcasm towards the cryptocurrencies.

The new statement issued on Dec. 29,  India’s Ministry of Finance warned the citizens against the risk associated with trading the cryptocurrencies, it also compared blockchain-based assets such as bitcoin and called it as “Ponzi Schemes”. This statement is the third warning from the Indian government, showing a growing level of concern among top regulators in the country.

The Reserve Bank of India has issued two similar warnings in 2017, one in February and another in the beginning of the December, to people who hold and trade cryptocurrencies.

The new statement from the Finance Minister again shows how the government is responding to the worldwide head in the price of various cryptocurrencies.

The statement says:

“The price of bitcoin and other [virtual currencies] therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”

The Ministry also indicated that India does not recognize any cryptocurrency as a legal tender and that no license is issued in the nation to allow any cryptocurrency exchange. Hence, users will carry the potential financial, operational, legal and security-related risks while investing in cryptocurrencies.

India’s Supreme Court has previously approved various government agencies to respond to an online request that demands a proper regulation over bitcoin.