Bitcoin is becoming infamous in India.
According to a report in online publication qz.com, nine police officers in India were arrested recently because they extorted money as well as bitcoins from a businessman. The officers stole $49,12,000 in cash and 200 bitcoins from the businessman in February. According to the report, the total value of bitcoins stolen was Rs.1.9 crore (approximately $138,025) at the time this report was written. The businessman claims that the thieves forced him to transfer money from one online wallet to another. (See also: India’s Bitcoin Startups And The Fundraising Gold Rush).
This is not the first bitcoin-related crime in India. Last month, a jewelry dealer lodged a police complaint alleging that bitcoins worth Rs.11.57 lakh (approximately $17,000) were stolen from his online wallet at Zebpay, India’s largest such service. There have also been instances of cryptocurrency exchange hacks that have affected investors in India.
Bitcoin’s phenomenal rise in the last year has had a ripple effect on its fortunes in India. Its price has skyrocketed in local cryptocurrency exchanges on the back of rising trading volumes. Mirroring actions of its counterparts across the world, the country’s central bank – Reserve Bank of India – has issued advisories warning the general public about the risks of investing in bitcoin. (See also: India’s Central Bank Issues Warning About Bitcoin). But its legal status in the country is still unclear. Earlier this year, the country’s finance minister declared earlier this year that bitcoin was not a valid medium for transactions. The RBI also prohibited banks affiliated to it from dealing in bitcoin-related transactions.
India is not the only country where bitcoin is being demanded as ransom. Last year, the Ukraine-based officer of a UK-registered cryptocurrency exchange was abducted and released only after he paid a ransom of $1 million in bitcoin. A lawyer in Mexico was also abducted for bitcoin but authorities there were quick to catch the criminals responsible and recover the ransom money.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.01 bitcoin.