A compelling case for regulating cryptocurrency

Mitali Mukherjee’s book, while repetitive and tedious, explains the need for standardised regulations and practices for this porous currency.

Published : Jun 12, 2024 11:00 IST - 6 MINS READ

A cryptocurrency ATM in Batumi, Georgia.

A cryptocurrency ATM in Batumi, Georgia. | Photo Credit: Andrey Rudakov/Bloomberg

Cryptocurrency is accessible anywhere. It feels smart and sophisticated. It is built to be technologically secure. It can be an asset as well as, in some parts of the world, a means of payment. It can be converted into fiat (cash) at a moment’s notice. And, unlike conventional financial instruments, it offers no barriers to adoption. With as little as a hundred rupees, an aspiring youngster in the hinterlands of India can buy a fraction of cryptocurrency and feel like a grand investor.

Mitali Mukherjee’s book Crypto Crimes deals with this alluring asset class that has the potential to exist beyond the reaches of governments and conventional financial institutions or at least dodge easy scrutiny by governments. This is why crypto is so popular among scamsters, kidnappers, extortionists, drug peddlers, hawala operators, terrorism financiers, and ransomware invaders. Mukherjee successfully depicts this web of nefarious activities. She describes the world of crypto as one without guardrails, lethal to many, and potentially dangerous to all. Like a good journalist, she does this by expertly piling fact-filled passages upon each other.

Crypto Crimes: Inside India’s Best-Kept Secret 
By Mitali Mukherjee
HarperCollins India
Pages: ‎336
Price: Rs.499

Two chapters dedicated to the threat posed by ransomware attacks offer us details about how a cross section of Indian organisations—both public and private—were affected. The list includes JNPT, SpiceJet, Oil India Limited, Dr Reddy’s, BSNL, Mobikwik, Paytm Mall, BigBasket, and AIIMS. In this model, the invaders have the option to not only extract ransom but also earn through the sale of sensitive personal information of the customers of these companies. The author highlights the inadequacies of security frameworks in many Indian corporates and also how some companies under attack resort to denials or react irrationally against whistle-blowers or those offering a helping hand. 

Even more revealing is the existence of “Ransomware-as-a-Service” groups that lease technologies to other groups that actually carry out the attack. But what is crypto’s role in ransomware? Well, it brings scalability to this grimly innovative industry by offering convenience and anonymity and, therefore, the promise of an untraceable escape.

Need for regulations

The book helps one understand the dire need for standardised regulations, protocols, and practices for this porous currency, which has as much disregard for national borders as greenhouse gases. However, with world leaders unable to build a consensus to combat greater existential threats such as climate change and AI, the only hope is that the global crypto market offers sufficient financial incentive for such a consensus to be reached.

As things stand, three different entities of the Indian government itself—the RBI, the Securities and Exchange Board of India, and the Ministry of Finance—are unable to agree upon the approach to cryptocurrency. Whereas the RBI has been sounding the warning bugle since 2013, the ministry has been inconsistent in its response. It has pondered over banning cryptocurrency altogether, created committees at various points that made different recommendations, and mulled over the introduction of its own virtual currency (Central Bank Digital Currency) and, after all these years, still has not formulated regulations for the domain. However, in 2022, it did announce heavy taxation of gains made in cryptocurrency, which affected the industry. Without a trace of irony, the Finance Minister denied that this move offered legitimacy to crypto and instead claimed “a sovereign right to tax”.

The book captures a sole, sane voice from within the corridors of power: former Finance Secretary Subhash Chandra Garg, who recommends that policy-making precede legislation, which can then lead to well-framed and implementable regulations.

  • Eshwar Sundaresan reviews Crypto Crimes: Inside India’s Best-Kept Secret by Mitali Mukherjee.
  • The book makes a compelling case for regulating cryptocurrency that may be longer-lasting than its detractors believe
  • Two chapters on ransomware attacks offer us details about how a cross section of Indian organisations were affected by these.
  • However the book suffers from poor storytelling and repetitiveness.

Tedious and repetitive

Now for the flaws of the book. The author often overloads the reader with information while resorting to poor storytelling, except in the last few chapters, which are more free-flowing. In some chapters, the same point is repeated in a loop, with a new source offering a similar or slightly differing perspective of the same point. In the process, the drama, emotions, and imagery surrounding poignant human moments are left untapped. Can a serious book not also be evocative?

Had the organisation of information been better, this would have been a much smaller book. It does not help that key points are repeated ad nauseum. These include the specific vulnerabilities of India to crypto crimes, the speed with which the technology penetrated rural and semi-rural landscapes in the country, market fluctuations vis-a-vis the pandemic, and the involvement of Russian and Chinese entities in ransomware attacks and extortions respectively. Sometimes, the same study is cited twice in a span of a few pages, such as the mention of Maharashtra being the target of 42 per cent of ransomware attacks in India. One wonders whether each chapter was written like an isolated article and, therefore, the author felt compelled to set contexts and data points all over again.

For a book that relies extensively on surveys and statistics, it seems astonishing that the author has made no attempt to leverage infographics. These could have made the points more memorable, while offering the beginnings of analysis. Forget a grand diorama of stakeholders, issues, and interactions, the book does not include even a timeline of events or a simple table or graph that would help one absorb comparative data.

Also Read | ‘Only the tip of the iceberg’: Dr Jayant Mahadevan on online gambling in India

Although the book has the viscous storytelling of a scholarly study, it lacks the rigour to make it one. A great deal of the book relies on secondary research; while citing these external sources of information, the author hardly ever offers more than rudimentary analysis of her own. And the primary research itself is unsatisfactory. The author has interviewed technocrats, the odd retail investor, some insiders, and a few crypto entrepreneurs. She walks on eggshells with the latter category, making no attempt to provoke or even challenge their self-serving opinions. For instance, when BuyUCoin co-founder Shivam Thakral laments the lack of financial literacy among Indians, the author does not ask whether this puts a greater onus on the government to protect such a target audience from harm. Perhaps just making an observation in this regard would have sufficed. Similarly, while interviewing Nischal Shetty, the co-founder of WazirX—a company that was slapped with a show-cause notice for allegedly contravening regulations of the Foreign Exchange Management Act to the tune of Rs.2,790.74 crore—who refuses to look within and states that people will always choose freedom (as opposed to regulations), she does not ask if all people, including the honest retail investor, would object to regulations that protect them. Finally, in a book based on hard research, the citations provided are not substantiated either in the back pages of the book or in the publisher’s website URL linked to a QR code that promises “Detailed Notes” on both the front and back sides of the book.

Overall, Mukherjee makes a compelling case for regulating this new asset class that may be longer-lasting than its detractors believe while also highlighting its potential for positive transformation. This makes the book a ready reckoner for those who want to delve into and dwell on the world of crypto. Others are likely to find it tedious and mediocre.

Eshwar Sundaresan is an author, freelance journalist, counsellor, life skills trainer, and bestselling ghostwriter.

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