J&K police warns against investing in cryptocurrency

Jammu and Kashmir Police Wednesday issued an advisory warning people not to make investments in cryptocurrencies like bitcoin due to the "heightened risk" associated with them.

The police also said this form of currency was not backed as legal tender by the government and central financial institutions.

"The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies (vcs) such as bitcoin because there is a real and heightened risk associated with them," an advisory issued by the Inspector General (IG) of crime branch said.

"This can result in a sudden and prolonged crash, exposing investors; especially retail consumers who stand to lose their hardearned money," it said.

The IG said the public needed to be alert to avoid getting trapped in such fraudulent schemes.

Through the medium of this warning notice and advisory, the general public is cautioned against the risks of investing in virtual currencies as these are not backed as legal tender by the government and central financial institutions, he said.

The Reserve Bank of India (RBI) has not given any license and authorisation to any entity and company to operate in such schemes or deal with bitcoin or any virtual currency, and such cryptocurrencies do not have any regulatory permission or protection in India, the advisory stated.

As there is no regulatory oversight on cryptocurrencies which use blockchain technology, all transactions are encrypted and there is high risk as this platform is used for carrying out subversive activities, smuggling, drug trafficking, human trafficking, terror funding and money laundering, the IG added.