NEW DELHI: Investments in cryptocurrency have come under the radar of tax authorities and investigation agencies amid concerns that they could have become conduits for illicit flows and the movement of black money.The Special Investigation Team (SIT) on black money appointed by the Supreme Court has expressed worries about cryptocurrency and suggested curbs on their trading in its draft report.“There are concerns on the way it operates... Some unaccounted money could be flowing into these,” said an official aware of the matter. The team is likely to submit its final report in a month, the person said.Policy makers are looking at the issue closely and are expected to take a call shortly, another government official said.Income-tax authorities and the Enforcement Directorate are also examining investments in cryptocurrency after the Indian government demonetised Rs 500 and Rs 1,000 notes in November last year. “There are issues with large investments flowing into this currency,” said a senior tax department official.Bitcoin, the most popular virtual currency, traded at $3,969 on Wednesday, down from highs of $4,359 a week ago.India has not yet taken a call on how it wants to treat cryptocurrencies, but the Reserve Bank of India (RBI) has cautioned against them. “As regards non-fiat cryptocurrencies, I think we are not comfortable,” RBI executive director Sudarshan Sen had said on September 13.Any user, holder, investor or trader dealing with virtual currencies is doing so at their own risk, RBI cautioned on its website in February. They pose potential financial, legal, customer protection and security-related risks, RBI said.China clamped down on cryptocurrencies this month and directed its two largest bitcoin platforms--BTCC and OKCoin--to stop all trading operations, putting the spotlight on fears over the electronic currency. The National Internet Finance Association of China, created by the central bank, warned on its website last week that such currencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising.”Japan recognises the currency and some other major markets such as the US and Canada have regulations in place.