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Supreme Court of India has imposed the trade prohibition on cryptocurrencies

In a major decision, on Wednesday the Supreme Court eliminated the curbs put on controlled institutions such as banks and NBFCs by the Reserve Bank of India from virtual currencies and from the provision of services for crypto companies. This Court held that the RBI circular, banning licensed institutions from giving banking services to traders …

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In a major decision, on Wednesday the Supreme Court eliminated the curbs put on controlled institutions such as banks and NBFCs by the Reserve Bank of India from virtual currencies and from the provision of services for crypto companies. This Court held that the RBI circular, banning licensed institutions from giving banking services to traders or encouraging trading in VCs, could be set aside on the “ground of proportionality”.

When the consistent stand of RBI is that they have not banned VCs and when the Government of India is unable to take a call despite several committees coming up with several proposals including two draft bills, both of which advocated exactly opposite positions, it is not possible for us to hold that the impugned measure is proportionate

The Court noted. A jury bench composed of Justices R F Nariman, Aniruddha Bose, and V Ramasubramanian, (The Web and the Wireless Association of India vs Reserve Bank of India) heard the case.

In April 2018, RBI released a circular banning regulated financial entities from supplying crypto companies with services. The prohibition came into force three months later and banks immediately locked crypto-exchange accounts.

The Circular released on 6 April 2018 instructed RBI-regulated agencies:

  • Not to trade with virtual currencies or to provide services that would encourage the processing or settlement of virtual currencies by any person or entity; and
  • Leave the partnership with those individuals or organizations if they have already been offering these services.

The Internet and Mobile Association of India and a few other stakeholders questioned this in the Supreme Court. The Association consisted of a few companies that run online crypto assets trading sites, certain companies ‘ shareholders/founders and a few individual crypto asset traders.

The United States, Philippines and Venezuela To Use Cryptocurrency ATM

The Court noted three considerations when overruling the circular:

  • RBI has not, in the past 5 years or more, found that the activities of Virtual Currency Exchanges have actually adversely affected the functioning of RBI-regulated entities
  • The consistent position was taken by RBI, including in its answer dated 04-09-2019, is that RBI has not banned virtual currency in the country and
  • Also, the Inter-Ministerial Committee formed on 02-11-2017, which originally recommended a special legal framework, including the introduction of a new law, namely the Crypto-token Regulation Bill 2018, were of the opinion that a ban could be an extreme tool and that regulatory measures can achieve the same objectives

The Court noted:

The position as on date is that VCs are not banned, but the trading in VCs and the functioning of VC exchanges are sent to comatose by the impugned Circular by disconnecting their lifeline namely, the interface with the regular banking sector. What is worse is that this has been done (i) despite RBI not finding anything wrong about the way in which these exchanges function and (ii) despite the fact that VCs are not banned

Advocate Ashim Sood, appearing for IAMI, argued that Reserve Bank of India had no jurisdiction to prohibit transactions in cryptocurrencies. The general ban was based on a misconception that it was impossible to regulate cryptocurrencies, Sood argued. It was also claimed that cryptocurrencies were not “currency” in the strict sense, and could be referred to as a medium of exchange or a store of value. Senior Advocate Shyam Divan, appearing for RBI, disagreed and said that it was a mode of digital payment that RBI had the power to control. Divan argued that the contested decisions were necessary because, in the opinion of RBI, VC transactions could not be referred to as a payment system, but only peer-to-peer transactions that do not involve a system provider under the Payments and Settlement Systems Act. Despite this, VC transactions have the potential to develop as a parallel payment system. It was also submitted that VCs could be used for illegal activities because of their anonymity.

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Members of WallStreetBets Forum Alleged in Telegram Crypto Scam Stealing $2M in BNB and ETH

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Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.

The Core of the Hoax

Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.

The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.

The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.

However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.


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The Aftermath

After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.

Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.

Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:

”Buying Lambo now.”

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Source: https://cryptopotato.com/members-of-wallstreetbets-forum-alleged-in-telegram-crypto-scam-stealing-2m-in-bnb-and-eth/

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South Korean Crypto Exchange Accused Of $1.5 Billion Scam

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The South Korean cryptocurrency exchange platform V Global was accused of luring 40,000 people into illicit multi-level deceit. The entire scheme amounts to more than 1.7 million won, which equals $1.5 billion.

The Investigation

As reported by the Korean officials, the police raided many places in the country related to a virtual cryptocurrency exchange, and its notorious CEO – known as LEE – alleged to fundraising without regulatory permission. The authorities blocked the exchange’s cash deposits as a part of the investigation.

In total, the Gyeonggy Nambu Police Agency reported that it searched the exchange’s headquarters in southern Seoul along with 21 other places and froze more than $214 million left in the account.

Another report from today shed more light on the developments. According to Yonhap News, the name of the organization is V Global. The Korean police are examining the accusations against them for fraud under the Certain Economic Crimes Weighted Penalty Act, the Similar Receiving Act, and the door-to-door sales business.

The main accusation against the exchange is gaining a deposit of 1.7 trillion won ($1.5 billion) from 40,000 members in the period between August 2020 and January 2021. The announcement revealed that most of the people were elderly or housewives with no experience in cryptocurrency trading.


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Too Good To Be True

The investigation revealed that the exchange urged investors to entrust their funds to an account and lured the members that the expected return would be three times higher than the initial investment. According to the authorities, there was a pyramid element in the scam as the exchange promised to grant an introduction fee of 1.2 million won ($1,065) for every newly recruited member.

The report affirmed that the trading venue paid some members in the form of a block. Therefore, people who signed up earlier received funds from individuals who entered the exchange later.

Moreover, the Korean police seem confident to deal with the fraud case as it revealed its intention to confiscate 240 billion won ($214 million) left in the V Global account as of the 15th last month, even before the prosecution process.

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Source: https://cryptopotato.com/south-korean-crypto-exchange-accused-of-1-5-billion-scam/

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Georgia’s central bank is exploring ‘Digital Gel’ CBDC

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The National Bank of Georgia said that it is considering launching a central bank digital currency.

In an announcement today, the central bank hinted at the issuance of a central bank digital currency, or CBDC, in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The National Bank of Georgia, or NBG, said it would be inviting fintech firms and other financial institutions to participate in the project, named Digital Gel after the symbol for the country’s fiat currency, the lari.

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” said the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”

However, the bank mentioned the possibility of risks in the launch of a CBDC in the Republic of Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but did not provide any details regarding a timeline for launch.

With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.

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Source: https://cointelegraph.com/news/georgia-s-central-bank-is-exploring-digital-gel-cbdc

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