The opposition party Indian National Congress has accused the ruling party, Bhartiya Janata Party of a multi crore scam involving Bitcoin. The party has dubbed it as the ‘Mega Bitcoin Scam’.
Giving details, Congress spokesperson Shaktisinh Gohil claimed that BJP used demonetisation to allow conversion of Black money to Bitcoin. He said the figure of conversion could be between 5000 and 88000 Crore Rupees.
One thing that media missed to report is that Gohil also said, “It (Bitcoin) is a type of currency that does not require conversion and can be spent anywhere in the world”. The world is struggling to regulate cryptocurrencies, Indian are fighting for regulation of Crypto in Supreme court, but our politicians say we can spend Bitcoins anywhere in the world.
Nevertheless, what needs to be noted is that somewhere, Bitcoin or rather cryptocurrencies did play a role in Surat’s extortion case. Shailesh Bhatt, a builder based in the diamond city, wrote to Gujarat’s junior Home Minister Pradeepsinh Jadeja in February, alleging that Amreli Police had extorted bitcoins worth Rs. 12 crore from him.
After Crime Investigation Department (CID) started investigating the case, it was discovered that Bhatt himself was an extortionist. CID on May 21 told the media that Bhatt had extorted Rs. 155.21 crore before he was kidnapped by the Amreli Police for extortion.
CID opened a new case to book Bhatt and others. Police (SP) Jagdish Patel, Police Inspector Anant Patel and former Bharatiya Janata Party (BJP) legislator Nalin Kotadia were accused. Kotadia is currently absconding.
The case is as complicated as it can get. But at the end, CID has put out a figure. According to the special story on The Hindu, Officials involved in the Bitcoin probe estimate that approximately ₹5,000 crore cash was converted into cryptocurrencies in Surat after demonetisation.
Opposition Demands Probe
Often times politics is all about finding faults in the other party. Congress jumped at the opportunity and seized it with both hands. Congress leader ShaktiSinh Gohil spoke to the media accusing BJP of a mega bitcoin scam of upto Rs. 88000 crore. The figure, he said, is from “leading international bloggers”.
TheNextWeb article published, Gohil said that a complaint with the local police has been filed, but it’s refraining from taking action due to political pressure. “We demand an impartial Supreme Court-monitored judicial investigation in this maze of ‘Mega Bitcoin Scam’ so that the truth comes out,” he told local reporters.
BJP hits Back
BJP spokesperson Anil Baluni said the allegation of the Congress were laughable.
“The dirty tricks department of the Congress is at work to spread confusion and lies. It is blaming the police, which has uncovered the case. I wonder if the Congress is trying to help somebody in this case as part of a conspiracy,” Baluni said.
Out of the entire scenario that has unfolded, the math seems to be out of focus. If someone bought Rs 5000 Crores worth of Bitcoins in December of 2016, and Bitcoin prices were around 61000 INR per BTC, the total quantity of Bitcoin purchased is roughly 833000 BTC. While I cannot prove it, I hardly think close to the a million of BTC from the 12 Million or so trading were actually bought in one city of India – Surat. But 5000 Crore is an achievable number.
The second number is what is beyond my understanding, Congress is citing reputed bloggers to accuse BJP of the scam worth Rs. 88000 Crore. It would mean a lot of cryptocurrencies other than bitcoin were also purchased. If all 12 Million Bitcoin were purchased by Black Money hoarders, it would still cost Rs. 72000 crore.
The total market cap of Crypto market was about 14 Billion USD or roughly Rs 95000 crore INR in December 2016. If Rs. 88000 crore worth of purchase happened in one city of India, I have no idea what to say to that.
Don’t Ignore, Don’t Exaggerate
It is no secret that Cryptocurrency market was thriving in India in 2016. Huge companies were floating around multi-level marketing schemes for investment in cryptocurrencies. People got rich. Very rich.
It also should not be ignored that there is one documented case of extortion using cryptocurrency ongoing right now. But to say that one city was able to convert their Rs. 88000 Crore worth of black money to cryptocurrency and hence make it white is preposterous. Bitcoin bought with black money still isn’t white money.
I would personally sit and wait for the CID to file a full report and if Congress would like to take it up with the BJP, the court is the best route for it so demanding a probe is a good move. Using the exaggerated number, not so much
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Update: A spelling mistake was corrected.