Book Review: Crypto Crimes - Inside India’s Best-Kept Secret

Everyone wants to get rich quick and some believe crypto is one way to get there

Cryptocurrency. Bitcoin. Digital assets. While the vast majority of people in India (and probably elsewhere in the world) have heard of these terms, most have very little or no understanding of what these really are, what they mean and what drives their value. And yet, many still believe that dabbling in these might somehow open the gateways to earning massive sums of money. This is, perhaps, what is truly amazing about cryptocurrencies – how little people understand these and how, despite having no idea of their underlying value (or the complete lack of it, depending on who you ask) they’re still prepared to invest in these anyway. Greed? Speculation? Yes, but given their meteoric rise in prices over the last 15 years, crypto can be an irresistible lure for some. Back in 2010, some guy named Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John’s pizzas. At that time, one Bitcoin was equal to around two or three US dollars. Today, one Bitcoin is valued at US$64,470. Can’t blame Hanyecz though; given its lack of any real, measurable value, who could have predicted Bitcoin’s crazy price trajectory?

While estimates vary, it is believed that more than 15 million people in India have already invested in cryptocurrency, the value of that investment standing at around US$10 billion. Crypto traders play fast and loose, in an environment that’s volatile and largely unregulated. You could make a ton of money or lose your shirt, and that is perhaps what makes it exciting for some. Earlier this year, RBI Governor Shaktikanta Das had warned crypto investors to be very careful, saying that cryptocurrency has no real underlying value and that its future in India is likely to be bleak. A cryptocurrency bill – the Cryptocurrency and Regulation of Official Digital Currency Bill – was scheduled in the Lok Sabha back in 2021 but things have not moved forward. India does propose to introduce some form of digital currency, issued by the RBI, at some point in the future, but no details – either pertaining to the currency itself, or the regulatory framework under which it will work – are currently available. In the meanwhile, even though the Indian finance ministry doesn’t seem to have a clear idea of how to deal with cryptocurrency and how to track and/or manage its usage, it does want to levy a 30% tax on gains made via crypto trading. Exactly how that’ll work – or won’t – remains to be seen.

While India remains something of a ‘wild west’ when it comes to cryptocurrency buying / selling / trading, there is ample potential for troublemakers to use crypto in a wide range of illegal activities. This is something that author Mitali Mukherjee writes about in her recently published book, Crypto Crimes: Inside India’s Best-Kept Secret. The book ‘uncovers the murky underbelly of cryptocurrency and traces its mercurial spread across India – from the interiors of UP, where crypto accounts are looted at gunpoint, to the small towns of Bihar, known for quick ‘black to white’ money switches, to Karnataka and the lure of drugs and parties,’ says the publisher’s note. ‘Even as law enforcement officials struggle to track them down, investigations reveal how cryptocurrency is allegedly being used for transactions in narcotics, drugs, smuggling, illegal betting and turning ‘black’ money to ‘white.’ Social media influencers have cashed in on the crypto mania, entrepreneurs have milked the trading enthusiasm and critical data has been under siege for crypto ransom,’ it adds.

‘For the youth, crypto trading is the newest trick in town; it is in play in ways many do not even realise. It would be fair to say that crypto coins epitomize the most complicated relationship of this era. Bitcoin and its crypto cousins present one of the trickiest regulatory challenges in recent times – investors and millennials love it, regulators hate it,’ says Mukherjee, who is currently the Director of journalist programmes at the Reuters Institute of journalism and who is herself a political economy journalist with more than two decades of experience in TV, print and digital. A cryptocurrency is a cross between a currency that you can use to pay for things, and a digital asset, which you can invest in for the long term, she explains. Unlike government-issued money, however, crypto is a 100% digital payments system that does not rely on banks for the verification of transactions. It is, instead, a peer-to-peer system that uses encrypted digital wallets to store cryptocurrency, and an online database where all crypto transactions are recorded in a public ledger. The whole thing works on the basis of its underlying blockchain technology, which is supposed to democratize and decentralize currency, taking power away from central governments and placing it in the hands of the people, the end users. Of course, the trouble starts when individuals – and organizations – start using crypto to break laws and indulge in illegal activity, for which there seems to be ample scope for those who may be so inclined.

In the Indian context, Mukherjee explains that the three major protagonists in the crypto story are the RBI, SEBI and the government of India, all of which can’t seem to agree upon crypto legality and usage. While the RBI has issued multiple warnings against crypto usage and, back in 2018, even asked banks and financial institutions to refrain from providing financial services to virtual currency exchanges. And yet, in 2020, the Supreme Court of India lifted the curbs imposed by the RBI on crypto. The finance ministry has expressed its disapproval, suggesting a ban on all cryptocurrencies except for any that the state itself might issue at some point in the future, while the government itself has spoken of encouraging innovation in crypto – a stand that seems incongruent with the finance ministry’s view. In this atmosphere of regulatory chaos, speculative investors and criminals continue to make hay while the sun shines. Drugs, kidnapping, extortion and Ponzi schemes run via online platforms have all been linked to crypto and Mukherjee writes about these in the book in an attempt to understand and examine just how have things gotten to this point.

The author writes about various crypto crimes that wreaked havoc on the unsuspecting. Swindlers – infamous characters like the late Amit Bhardwaj – who played a major role in the spread of crypto across small towns in India, and who took advantage of people’s complete lack of understanding of digital assets and fleeced them of their hard-earned money with his devious, crypto-linked schemes. Elaborate, well-engineered scams where people were lured, via popular social media that are commonly used by a large cross-section of the society, into investing in crypto, with the masterminds behind such schemes later clearing off with the victim’s money. Worthless crypto coins, fake crypto exchanges, elaborate MLM setups, fake endorsements targeting clueless victims and exhorting them to invest in spurious crypto schemes – it seems scammers stop at nothing if there’s free, easy money to be made. Also, some groups in the society may be particularly vulnerable. Seniors, for one. ‘Seniors could be more trusting of people, but more importantly, they are often less knowledgeable about technology and things like crypto,’ the author says. ‘Scams often play on the anxiety of this age group to try and save enough for retirement, with the promise of a foolproof get-rich-quick scheme,’ she adds, pointing out that the problem could be much bigger than it seems since for every reported case of crypto scam, more than 40 such cases might remain unreported.

Mukherjee also writes about many other aspects of the cryptocurrency phenomenon in India – crypto influencers and the role they play in bringing more people into the fold of crypto trading, young people’s growing fascination with crypto, fueled by dreams of earning large sums of money quickly and without doing too much, and the different currencies that are now in vogue – not just Bitcoin, but also Shiba Inu, Meta, TRX, Litecoin, Ethereum ICX, Ripple, Dogecoin and the list goes on. The author speaks to young people across the country, who have chosen to invest in crypto and writes of their stories – their dreams, their ambitions – and how, in some cases at least, crypto trading helped their dreams come true. These young, self-taught traders remain wary though, given the extremely volatile environment in which crypto trading happens, with price movements remaining unpredictable for the most part. The stories themselves are quite endearing and illustrate small-town India’s fascination with crypto trading, this being seen as a way out of financial limitations, a way of being able to afford luxuries like an iPhone, a fancy computer or even car, all of which might otherwise have been unattainable.

‘What started off as an exploration turned into a deep and fascinating learning curve for me about the crypto industry, its believers and sceptics, and, amid the tangled undergrowth of financial fraud, many human stories,’ says Mukherjee. And that also sums up the book – it is indeed a comprehensive, in-depth, 360-degree look at the crypto mining, trading and investing scenario in India, driven as it is by the desire to make a quick buck in spite of the challenges and the risks, of which there are many. Sure, as is made clear in the book, crypto remains a powerful took in the hands of scammers who will go to any length to take advantage of trusting, clueless victims and strip them of their last penny. And there are many regulatory challenges and taxation issues that remain unresolved for now. But none of that is going to stop a people from having a go anyway – the lure of easy money has always been irresistible for human beings and crypto, if anything, only amplifies the desire to make a quick buck. The crypto rollercoaster is in full swing and there is no looking back. Where we go from here is anybody’s guess. In the meanwhile, for anyone who wants to more about the cryptocurrency scene in India, with a special focus on the crimes associated with crypto, Crypto Crimes is the one book you must absolutely read.

Crypto Crimes: Inside India’s Best-Kept Secret is available on Amazon