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India's Ministry of Finance issued a cryptocurrency warning that Bitcoin is like a "Ponzi scheme"

The Indian government is stepping up its public criticism of cryptocurrencies.

In a new statement released on December 29, the Indian Ministry of Finance warned residents of the risks involved in trading cryptocurrencies and even compared blockchain-based assets such as bitcoin to "Ponzi schemes." This statement, the third warning issued by Indian government agencies, shows that the country's top regulator is increasingly worried about cryptocurrencies.

According to Coindesk, the Reserve Bank of India has issued two similar warnings to those holding and trading cryptocurrencies in 2017, one in February and the other in early December.

However, this new announcement from the Indian Ministry of Finance shows once again how the government is responding to soaring global prices of various cryptocurrencies.

India's Ministry of Finance said:

"The price of bitcoin and other cryptocurrencies is entirely speculative, and these speculations have led to sharp price swings, a real and obvious risk for investment bubbles, as seen in the Ponzi scheme ... Consumers Need to be vigilant and very cautious to avoid falling into this Ponzi scheme.

In addition, India's Ministry of Finance also emphasized that India does not recognize any cryptocurrencies as legal tender and does not license any cryptocurrency exchange. As a result, users are exposed to potential financial, operational, legal and security risks when investing in cryptocurrencies.

This notice can be said to be directed against India's existing cryptocurrency traders, according to CoinMarketCap data show that a well-known Indian cryptocurrency exchange Koinex current daily turnover reached 115 million US dollars.

In addition to the warnings, it is also worth noting that India is engaged in discussions on whether and how to regulate cryptocurrencies.

India's Supreme Court had previously urged government agencies to respond to an online petition asking for proper regulation of bitcoin.

In fact, in August this year, a proposal for the monitoring of cryptocurrencies has been submitted to the Ministry of Finance. However, the content and timetable of this regulation are still not clear. Therefore, the new statement from the government agency may mean that India will adopt a more stringent regulation.