Explained: Indian investigative agencies in favor of curbing cryptocurrencies, know what is the reason
Explained: Indian investigative agencies in favor of curbing cryptocurrencies, know what is the reason
New Delhi. India's top investigative and intelligence agencies are considering making rules on digital currencies after the government's proposed move to ban all private cryptocurrencies sparked debate. Officials say that due to the anonymous nature of the transaction, there could be difficulties in preventing and misusing it on a large scale.

The  Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 has been listed for the upcoming winter session of Parliament and has been approved by the RBI to promote the underlying technology while allowing an official digital currency. Attempts have been made to ban all but a few private cryptocurrencies.

Speaking to News18, officials of the Narcotics Control Bureau (NCB), National Investigation Agency (NIA), Enforcement Directorate, Income Tax and other investigating agencies said that the biggest issue in this is the anonymity of the criminals, drug smugglers and terrorists. Organizations can get help.

Difficult to
collect transaction details A senior NCB official said, “In case of any suspicious transaction it is almost impossible to know the full chain of transactions and the persons involved. There is no unified cryptocurrency exchange and no one knows who controls it and collects all the data. Companies dealing with cryptocurrencies also have limited access and are able to keep limited information about users and transactions through KYC.”

This problem is not limited to India, as globally also, law enforcement agencies are concerned about criminal use of cryptocurrencies. Realizing the gravity of the complexity and expertise required to investigate cryptocurrency-related cases, the United States last month announced a National Cryptocurrency Enforcement Team (NCET). The US government said, “This team will deal with complex investigations and prosecutions of crimes committed in relation to criminal misuse of cryptocurrencies, particularly the exchange of this virtual currency, mixing and tumbling services, and money laundering infrastructure.”

Transaction to go hard to trace sharper
former DGP Shashi Kant of Punjab actively in anti-drugs operations, told News 18: "They (Kriptokrensi) are routed through the usually multiple networks. Their transactions are very fast and are often difficult to trace. This is more true of private cryptocurrencies. Cryptography keeps transactions secure. They are accepted at all e-commerce storefronts on the dark web. Hence, they come in handy for hawala transactions, money laundering and terror financing.”

Interpol, too, has marked an increasing use of technologies that lend anonymity to such operations, making them liable to abuse by criminal organizations.

Darknet is also a big headache
Interpol said, "There has been an increase in the use of technologies that hide the identities of their users. The darknet – a large part of the Internet that can only be accessed using specialized software – and virtual cryptocurrencies have many positive benefits, but not revealing identities makes it easy for criminals to misuse. Illegal sale of drugs, fire arms and explosives; smuggling; money laundering; terrorist activities; And cyber crime can be made easier with the help of these technologies.”

Major issues related to dark web and cryptocurrencies were discussed in April this year during the BRICS seminar on misuse of internet by terrorists organized by NIA. Sources said that during the seminar, attended by 40 experts from five member countries, all participants expressed the need for a stricter ban on cryptocurrencies and concerns over the use of crypto by unknown people.

Impossible to Track Crypto Transactions
Cyber ​​expert Jiten Jain told News18, “Technically, it is not possible to track crypto transactions for a particular user. You can track the transactions by using an open ledger where the funds have been transferred by the entity of the person receiving or transferring the funds. “Unless you have some deep database of exchanges, or KYC-verified users of a legitimate exchange, it is very difficult to trace,” Jain explained. However, he added that banning cryptocurrencies is not an option.

One of the major and widespread abuses of cryptocurrencies is drug smuggling. Giving details about an international drug smuggling nexus involving cryptocurrencies, the NCB had said, “The sourcing of the drug was primarily through the darknet, which does not allow the identities of buyers and sellers to be revealed. Economic transactions in this type of international drug trafficking are based on cryptocurrency transactions.”

Cases
of cryptocurrencies related to crimes have come to the fore with many state police forces and central agencies as well. In this, except confession, investigators do not get any help in solving such cases.

The ED is currently probing the bitcoin scam for drugs after the local Karnataka CID arrested a hacker named Sriki. The hacker is alleged to have collected bitcoins worth Rs 9 crore by hacking accounts dealing in cryptocurrency. The accused is accused of taking drugs through the darknet, during the investigation the names of relatives of some top political leaders came to light.

Similarly, the NIA had filed a chargesheet last year alleging that an ISIS operative named Jahanzaib Sami had received funds through bitcoin to be used for terror activities in India. The accused and his wife Hina Bashir were arrested from Delhi and were allegedly planning terror attacks in India.

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