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Officials said the Bill — ‘Banning of Unregulated Deposit Schemes’ 2018 — was expected to be introduced as soon as the Budget session of Parliament resumed after recess next month.
Earlier, the finance ministry had warned investors of investing in cryptocurrencies, saying those were like ponzi schemes.
The legislation comes at a time when the financial world has been hit by frauds and misappropriation of funds. Many are reported to have bought cryptocurrencies during the demonetisation period.
There are many deposit schemes, which are still unregulated in India, even as the market regulator, the Securities and Exchange Board of India (Sebi), regulates what is called the "collective investment scheme" (CIS).
The CIS is an investment scheme or an arrangement by which individuals pool their money for investing in particular assets. Similarly, chit funds are regulated by the Chit Funds Act of the Centre and various state laws.
Cryptocurrencies are unregulated even as gains made in them are taxed in India.