In the Guru Dutt classic Pyaasa, made in 1957, the protagonist Vijay offers his coat to a beggar who gets run over by a train. The world presumes the poet is dead, leading to the posthumous publication of his work and a dubious fame that becomes an object of literary debate. That came to my mind as the mistaken arrest and subsequent bail of the co-founders of CoinDCX hit the headlines.
Taking off from Pyaasa, you could slam mistaken arrests as poetic injustice, but what CoinDCX has done overturns it to something like a romantic version of justice. The cryptocurrency exchange has announced a Rs 100-crore cyber safety fund called the Digital Suraksha Network, aimed at strengthening India’s digital finance ecosystem.
Early evidence suggests that CoinDCX was not at all involved in transactions linked to the alleged fraud. The irony is that Sumit Gupta and Neeraj Khandelwal were held by police in a case linked to a fraudulent website that impersonated their own brand
To be frank, my first reaction was to suspect crypto fraud, given the controversies surrounding cryptocurrency. We live in a country where big loan defaulters and assorted fraudsters often roam free, and crypto is a suspect field.
The Irony of Reform Triggered by Elite Suffering
One may say with cynical hindsight that when the rich get hurt by mistake, it may result in better conditions for society. Were it not for a white racist ticket-checker who threw out Mohandas Karamchand Gandhi of a railway compartment, in spite of his having a valid first-class ticket, the history of India might well have been different. One hopes the CoinDCX arrests set a similar precedent, but this is no matter for casual musing.
The case shows red flags all over and is a wake-up call for effective policing that does not target innocents, especially as this involves a horrible mix of insensitive law enforcement in India that often violates civil rights and the emergence of new technologies that increase the chances for fraud and heists. Digital literacy is low and new-age cyberspace possibilities are beyond the comprehension of ordinary folk.
India’s track record in detaining poor, young people without trial is a matter of global shame, though the official position of the country is as a liberal democracy that respects the rule of law. Nearly six lakh people languish in Indian prisons without trial. A few years ago, a study by Ashoka University estimated that about 77 percent of Indian prisoners were “undertrials”, and close to one-third of them had spent more than a year in jail without any conviction.
In such a backdrop, technological disruptions that catch law enforcers without the required knowledge, resources or discipline is a recipe for social disaster. Here’s where CoinDCX’s cyber safety project mixes smart business development with social conscience to show the way that regulators and policymakers need to take note of.
Policing in the Age of Algorithms
There are enough instances in recent times, both in India and overseas, to show that we need to take cyber security and digital safety to the next level. While the Reserve Bank of India is leading efforts to sensitise the public to guard itself against “digital arrests” and other such instances of fraud, we have to ask seriously if local police and officials at the various layers of administration are prepared for newer variants of law-breaking in a manner that does not violate the fundamental rights of genuine citizens or businessmen and women.
In the UK, police recently arrested software engineer Alvi Choudhury for a burglary in a city that he had never visited. Their fault was in relying on a face-scanning system deployed across the country that confused him with another Asian-origin person. Choudhury was released after 10 harrowing hours.
In the US state of Hawaii, a local council awarded a compensation of $975,000 to a man who was wrongfully detained in a state psychiatric hospital in a case of mistaken identity that dates back 15 years.
In February, the Allahabad High Court set aside criminal proceedings against two men after finding they were arrested on the basis of mistaken identities—just because their names were similar to the ones wanted by the police. The court allowed them to seek compensation under Article 226 of the Constitution, which enables the enforcement of fundamental rights because the arrest violated personal liberty.
From Victimhood to Institutional Response
The CoinDCX founders can potentially act on this precedent to seek damages, though they have chosen their detention as an inspiration to build confidence in the digital ecosystem.
The Digital Suraksha Network, besides raising public awareness on frauds, plans to have a WhatsApp helpline to verify links, platforms and offers and also support nationwide training programmes on blockchain technology forensics that help track transactions.
It is clear that such efforts need to be scaled up by state agencies with rules, regulations, processes and training methods. Old-fashioned bureaucrats and cops simply will not do. CoinDCX points to AI tools as a key potential threat source and talks of collaboration between crypto exchanges, fintech (financial technology) companies, banks, and regulators to combat fraud on a large scale.
There is an apocryphal story cited by the late Dewang Mehta, when he was the president of the National Association of Software and Service Companies (Nasscom). He said policemen deployed in a cyber law violation once gleefully told their superiors investigating the case that incriminating floppy disks with relevant data were safe in their police station.
The floppy disks were indeed found to be physically safe, but nailed to the wall in a useless fashion that damaged the contents! That tale serves as a symbol of how cybersecurity requires that extra degree of education and policing processes, so that the law follows enforcement, education, and efficacy in a rational manner.
Are we prepared for this? Not quite, me thinks.
(The author is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)