The Jammu and Kashmir Police has warned people against investing in cryptocurrencies and virtual currencies.
"Through the medium of this warning notice/advisory, the general public is cautioned against the risks of investing in virtual currencies /cryptocurrencies such as Bitcoin as these are not backed as legal tender by the government/central financial institutions," a statement said.
"The general public is therefore informed, not to make any type of investment in cryptocurrencies/ virtual currencies (vcs) because there is a real and heightened risk associated with them. This can result in a sudden and prolonged crash, exposing investors; especially retail consumers who stand to lose their hard earned money. Public needs to be alert and extremely cautious to avoid getting trapped in such fraudulent schemes," it added.
The RBI has not given any license to operate in Bitcoin or virtual currency and such crypto-currencies do not have any regulatory permission or protection in India.
As there is no regulatory oversight on the cryptocurrencies which uses blockchain technology, all the transactions are encrypted and there is a high ended risk as this platform is used for carrying out subversive activities such as smuggling, drug trafficking, human trafficking, terror funding, and money laundering activities.
While the government has not made cryptocurrency as legal, India's first Bitcoin ATM kiosk was set up in Bengaluru in October 2018. It had allowed people to withdraw money they made by investing and trading Bitcoins. However, the police seized the ATM and arrested the co-founder, Harish BN, claiming that trading in cryptocurrency was illegal.