A new alleged Bitcoin scam has surfaced in India. Local sources claim over 5,000 crore worth of Bitcoin has been stolen. This news comes at an unfortunate time for the cryptocurrency industry. India’s Supreme Court ruled in favor of preventing cryptocurrency firms from accessing banking services.

Another Bitcoin Scam in India?

Cryptocurrency scams have popped up regularly over the years. A fair few of these projects seem to focus their attention on India. A new scam has been allegedly discovered, according to Gujarat Congress spokesperson Shaktisinh Gohil. In his opinion, this fraudulent project has “multiple layers.” Moreover, it appears anywhere from 5,000 to 88,000 crore has been lost in the process. (This amount equates to hundreds of millions in USD.)

The allegations related to this new discovery are quite severe. Gohil claims the scam is built around kidnapping, extortion, corrupt government officials, and so forth. He also points a finger of blame as several Bharatiya Janata Party leaders. A politically-influenced Bitcoin scam has not been uncovered before in India.

Proving all of these allegations will be tricky. Although a complaint was made against Gujarat’s Amreli district police officials, it can be an isolated incident. That extortion attempt revolved around 200 bitcoins and a high amount of cash. An official investigation has been launched since then. According to Gohil, there is evidence of Amreli district police partaking in extortion schemes.

Overall, this appears to be a very convoluted case, and each layer peeled off reveals something new. The alleged mastermind is apparently absconding. Calls have been made for the Modi government to come in and investigate, but local officials have said that the national government has no interest in the case and is actually working to intimidate their political rivals.

Uneasy Bitcoin Situation Remains

While these allegations are being investigated, an uneasy situation remains. Bitcoin is not legal tender in India. The government is in the process of unveiling its official cryptocurrency regulation. This latest incident will not help matters in this regard.

There’s also the recent ruling by India’s Supreme Court. By backing the Reserve Bank’s decision to halt services for cryptocurrency companies, the ecosystem’s growth is hindered. All of this seemingly points at an impending ban on cryptocurrency in India. That would be troublesome for the cryptocurrency industry in general.

India has been a key region for Bitcoin and altcoins. Domestic exchanges generate a lot of volume every single day. Additionally, there has been a notable increase in demand for various currencies. How that situation will evolve remains unclear. If politicians use Bitcoin as a tool for crime, the outlook is rather negative. For now, these allegations have yet to be fully proven in an official manner.

What do you think about the future of Bitcoin in India? Let us know in the comments below.

Images courtesy of Shutterstock.

The post Alleged Bitcoin Scam in India Doesn’t Bode Well for Future Regulation appeared first on Bitcoin Network, News, Charts, Guides & Analysis.