The operations were led across six major cities - Bengaluru, New Delhi, Hyderabad, Kochi, Kolkata, and Gurugram - by the Bengaluru wing, under the Karnataka and Goa directorate of the department.
Under section 133A of the IT Act, the survey is being conducted for gathering evidence in order to establish the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others.
Other members of the panel include Securities and Exchange Board of India Chairman Ajay Tyagi and Reserve Bank of India's Deputy Governor B.P. Kanungo, the people said, asking not to be identified as the decision was not public.
"Even though virtual currencies do not have legal status in India, cryptocurrency exchanges have been adding over 3,500 users a day and now have reached 8 lakh downloads, said a source privy to the matter". Contrary to those claims, Reuters cites a tax department official as stating that the authority is investigating bitcoin exchanges to learn how investors are trading bitcoin on the exchanges with the intent to collect taxes. Both Panama and Paradise exposes had revealed 500 and 714 Indians respectively who have allegedly hidden a major portion of their incomes through shell companies in overseas. Unlike government-controlled money, which can be inflated, the supply of Bitcoins is limited to 21 millions, and this cannot be changed. And since there is neither a licensing, nor regulation, miscreants can always fool gullible investors and dupe them of their funds.
This is the third time that the central bank has come with a warning notice against the usage of virtual currencies. It is encrypted but safe, where every transaction is verified by network nodes and recorded in a virtual ledger called the block chain, which helps ensure the authenticity of transactions of crypto currency between the two peers and prevents fraud.