The government has requested that WhatsApp provide an explanation for why regulatory action should not be taken in response to a proposal to replace the phone number username feature. The government claims that doing so could "materially increase the risk of cybercrime" and include financial fraud, phishing, impersonation, identity spoofing, and "digital arrest" scams. A copy of the warning has been obtained by NDTV. Additionally, it has instructed the platform to hold off on launching the functionality in India until after government talks are finished.
The government said it had taken note of WhatsApp LLC's (Meta) announcement of a phased rollout of usernames that would let users to connect without disclosing their mobile numbers in a show-cause notice."The proposed functionality has the potential to significantly facilitate cyber fraud by enabling malicious actors to conceal their identity while impersonating trusted entities," the notification stated. Cybercriminals might make usernames "closely resembling those of individuals, government agencies, financial institutions or other organizations," which would facilitate identity spoofing and phishing.
At a time when instances of online financial theft and digital arrest scams are increasing, the authorities claimed the feature might jeopardize efforts to combat cybercrime. "The concealment of mobile numbers from first-time contacts may impede the ability of users and law enforcement agencies to identify and verify the identity of the communicating party," it stated.

The Center requested that WhatsApp explain why action under the "Information Technology Act, 2000," the "Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021," and other relevant laws should not be taken, citing the company's responsibilities as a "Significant Social Media Intermediary." The notice specifically refers to "Sections 66C and 66D" of the IT Act, which deal with identity theft and cheating by personation using computer resources, "Rule 4(2)" regarding the identification of the first originator of information, and "Section 79" of the IT Act, which grants intermediaries safe harbor subject to due diligence obligations.

Within three days of receiving the warning, WhatsApp is required to provide its answer and any supporting documentation. Additionally, the notice states that it has been issued "without prejudice to any further action" that may be taken under applicable law and instructs the company to "refrain from rolling out the proposed 'username' functionality in India until consultations with this Ministry are completed to its satisfaction."