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Despite the recent increased interest in cryptocurrency-related businesses in India, most firms have not registered yet with the country’s Registrar of Companies (RoC). The nation’s Minister of State for Finance and Corporate Affairs revealed the findings as a response to a previously submitted investigation report that looked into fraudulent “bit coin companies.”
Fraudulent Cryptocurrency Companies in India
Member of the Indian parliament, Mohammed Faizal, recently raised three questions with the nation’s lower house of bicameral Parliament, the Lok Sabha, regarding cryptocurrency-related businesses registered in the country.
The first one was if the Government is aware of the “growing reports of cheating and fraudulent practices by bit coin companies.”
Secondly, if those firms are violating any rules established by the Corporate Affairs Ministry by not filing annual balance sheets. Lastly, what actions the officials are taking against them.
The Minister of State for Finance and Corporate Affairs, Anurag Thakur, issued the response. He noted that “the Bit coin companies are not defined under the Companies Act.” He added that previously the RoC examined numerous businesses. They filed violations under various provisions of the Companies act against such a firm called ZEB IT Services.
The latter responded quickly and filed its Balance Sheet as of 31.03.2019 and is currently up-to-date with the local legislations.
As of now, there are two cryptocurrency-related companies registered with RoC – ZEB IT and Unocoin Technologies.
India and Cryptocurrencies
The second-most populated country in the world has a compelling history with digital assets. Two years ago, the nation’s Reserve Bank (RBI) ordered all financial entities regulated by it to stop operating with individuals or businesses that utilize cryptocurrencies. Even though the bank later clarified that this is not a direct ban on digital assets, most companies stopped using them.
However, the situation changed radically at the start of March when the Indian Supreme Court quashed the directive.
The positive effects were immediate. Aside from local cryptocurrency projects rising, new businesses also rushed into the country. The latest came only yesterday when Binance and local cryptocurrency exchange WazirX announced a new initiative. It’s a fund dubbed “Blockchain for India,” and its mission is to invest in blockchain-related startups focused on solving industrial and social issues.
With numerous newly entering cryptocurrency businesses in India, it would be interesting to follow how they will cope with the nation’s regulations.