The Investor Education and Protection Fund (IEPF) is planning to launch an outreach program aimed at educating the public about cryptocurrencies and online gaming. Amidst the recent turbulence in the crypto market, coupled with the risky promotion of online gaming, there is a dire need for comprehensive investor education. The outreach program aims to help potential investors make informed decisions in these complex sectors.
An Insight into IEPF
The IEPF authority, established under Section 125 of the Companies Act, 2013, manages the IEPF. The responsibilities of this authority include promoting investor awareness, refunding unclaimed dividends, matured deposits, shares, and debentures to rightful claimants. The primary aim of the investment education initiative is to educate household investors, professionals, and housewives in both rural and urban areas about several focus areas.
The Growing Concern Around Cryptocurrency
There are rising concerns about cryptocurrencies due to their potential destabilizing effects on the monetary stability of countries. In India, crypto exchanges are under scrutiny for alleged involvement in illegal practices such as drug trafficking, money laundering, violation of foreign exchange laws, and GST evasion. As of December 2022, three individuals were arrested, and four prosecution complaints were filed under the Prevention of Money Laundering Act (PMLA). The Reserve Bank of India (RBI) has called for legislation to prohibit the use of cryptocurrencies.
The Dynamics of Online Gaming
The Ministry of Electronics and Information Technology (MeitY) has been appointed as the nodal industry for online gaming, with the Department of Sports under the Ministry of Youth Affairs and Sports handling e-sports. The proposed framework from MeitY is slated to address several issues plaguing the sector. A key point of confusion is distinguishing between a ‘game of chance’ and a ‘game of skill’. Also, the increasing risk of cybercrimes underscores the need for regulatory measures. The Supreme Court and several High Courts have upheld ‘Games of Skill’ as legitimate business activities, distinct from ‘Games of Chance’.
The Road Ahead: Crypto Regulation
Beyond the outreach program, there is also an urgent need for a regulatory framework for the crypto sector. Misconceptions about the legality of virtual currencies could lead individuals into unlawful transactions like money laundering using crypto assets. However, it’s essential to note that legal banking channels can also facilitate such transactions.
Previous Year UPSC Civil Services Examination Question
In the 2020 UPSC Civil Services Examination, the following question was asked; “With reference to ‘Blockchain Technology,’ consider the following statements. It is a public ledger that everyone can inspect, but which no single user controls. The structure and design of blockchain are such that all the data in it are about cryptocurrency only. Applications that depend on basic features of blockchain can be developed without anybody’s permission”. The correct answer was options 1 and 3 only.
In another question in 2018, candidates were asked about the relation of ‘WannaCry, Petya, and EternalBlue’ terms, with the correct answer being ‘Cyber attacks’.
In the Mains paper of 2021, the question was “What is Cryptocurrency? How does it affect the global society? Has it been affecting Indian society also?”
