Thousands of Indians dealing in cryptocurrency got tax notices, after a nationwide survey by the Income Tax Department showed that tmore than $3.5 billion (Rs 2,235 crore) worth of transactions were conducted over a 17-month period, Reuters reported on Friday.

Tax officials told Reuters they are gathering data from nine cryptocurrency exchanges in Mumbai, Delhi, Bengaluru and Pune.

Cryptocurrency exchanges allow customers to trade digital currencies for other assets or different digital currencies. They are largely unregulated currently.

The I-T Department’s data showed that young investors, real estate players and jewellers were among those who have invested in bitcoin and other virtual currencies. The notices were sent to find out patterns of the virtual currency trade, BR Balakrishnan, a director general of investigations at the department in Karnataka, told Reuters.

“We cannot turn a blind eye,” he was quoted as saying. “It would have been disastrous to wait until the final verdict was out on its legality.”

Reuters accessed the notices to find that the tax department has asked people dealing in bitcoin and other virtual currencies to pay tax on capital gains, apart from details of their total holdings and source of funds.

“We found that investors were not reflecting it in their tax returns, and the investment was not accounted for,” Balakrishnan said.

The unregulated nature of the system and its soaring popularity have governments across the world on its toes to protect investors from fraud.

The Indian government and the Reserve Bank of India had earlier warned users against virtual currencies. The government even compared them to ponzi schemes and warned traders of the risks, including “permanent loss of money”.

An Indian Finance Ministry official told Reuters a committee was looking into imposing restrictions on virtual currencies.

On Thursday, South Korea said it is considering shutting down domestic virtual currency exchanges. Japan and China, too, have been mulling over a regulatory crackdown, the Reuters report said.

Policymakers are likely to discuss the subject at a G20 Summit in Argentina in March.