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As India holds one of the top positions among top crypto investors government cracks a whip to control it

The Directorate of Enforcement recently froze the assets of WazirX and Vauld.

As India holds one of the top positions among top crypto investors government cracks a whip to control it
Cryptocurrencies are getting into the mainstream as media outlets and exchanges are offering cryptocurrencies as investment and trading assets, said Jindal.

The United Nations Trade and Development (UNCTAD) recent report where-in it stated that 7.3% of Indians either own or had owned digital assets in the shape of cryptos in 2021, has raised several eyebrows. One of the main concerns is that if that cryptocurrency could unofficially replace national currencies if allowed to grow unchecked. “The global cryptocurrency market remains highly volatile due to many economic and socio-political factors. The only certainty is the continued growth and innovation of the Web3.0 space as more institutions deploy capital into it,” Aniket Jindal, co-founder, Biconomy, a blockchain developer platform, told FE Digital Currency.

What is to be noted here is that the Reserve Bank of India (RBI) has been a constant critic of crypto assets. Furthermore, recently in a series of raids the Directorate of Enforcement (ED) froze the assets of WazirX and Vauld. “The owners of India-based crypto exchanges such as WazirX and Vauld failed to provide satisfactory explanations of transactions and often contradicted them. Funds from financial technology (fintech) have been collected through exchanges and diverted to untraceable foreign wallets,” Sankhanath Bandyopadhyay, economist, Financial Sector, said, adding that there should be appropriate disclosure toward Comptroller and Auditor General (CAG), RBI, Securities and Exchange Board of India (SEBI) by each crypto exchange, it may happen during income tax return file.

Also Read: Binance clears its position; removes off-chain fund transfer with WazirX

As per a recent report by Chainalysis — a blockchain data platform, over one million dollars was traded in illicit cryptocurrency in 2021.

Source: Chainalysis.

Moreover, the UNCTAD report noted that the use of cryptocurrencies had increased exponentially globally because of the COVID-19 pandemic. India was ranked sixth in crypto adoption, whereas  It is believed that numerous investors have benefited from a high level of usage of crypto. “Cryptocurrencies are getting mainstream with media outlets and exchanges offering it as an investment and trading asset. Blockchain is here to stay and as regulations and government policies evolve alongside, we anticipate that user adoption will grow with the technology,” added Jindal. 

For industry experts, the introduction of the ‘Crypto bill’ will favour the Indian government to maintain checks on the transaction. “Centralised procession of transactions and framework is expected to be laid by the bill. The purpose of forex transactions, which refers to the purchase and sale of foreign currencies above certain threshold limits is notified to RBI. Likewise, the government will put a cap on crypto transactions and define disclosure guidelines,” Gaurav Mehta, founder, Catax – Simple Crypto Taxes, said.

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First published on: 24-08-2022 at 08:43:53 am