Crypto Bill and Regulation In India:
The Indian government has offered some updates on its cryptocurrency bill and the Lok Sabha, the lower house of the Indian parliament, investigations into bitcoin exchanges. The minister of state for finance stated, “Crypto assets are by definition transnational and require international engagement to prevent regulatory arbitrage.”
Indian Government Provides Responses to Crypto Bill and Regulation Questions
On Monday, different members of the Lok Sabha, India’s lower house of parliament, posed two sets of inquiries to the Indian government on cryptocurrencies and their regulation.
To determine “the current status of the cryptocurrency bill, which was due for a table during the winter session of the Parliament in 2021,” and “the timeframe within which the cryptocurrency bill would be tabled and subsequently be open for public inputs,” Parliament member Bhartruhari Mahtab asked the minister of finance.
In response, Pankaj Chaudhary, a minister of state in the Ministry of Finance, did not give a time frame:
Since cryptocurrencies are, by definition, borderless, international cooperation is necessary to prevent regulatory arbitrage. Therefore, any relevant regulation can only be effective with substantial international collaboration on risk and benefit assessment and the development of common taxonomies and standards.
Mahtab additionally requested information from the finance minister regarding the ministry and department in charge of overseeing the regulation of cryptocurrencies, crypto tokens, and other “virtual digital assets” like non-fungible tokens (NFTs), decentralised applications (dApps), real estate tokens, and other blockchain-based assets.
Chaudhry Only Retorted:
The Ministry of Finance currently oversees policy regarding crypto assets and the ecosystem that surrounds them.
Parliament Members Also Request Information About Crypto Exchanges That Are Being Investigated
Another set of inquiries by several additional lawmakers asks for “the specifics of cryptocurrency exchanges which are under official investigation for money laundering and tax evasion cases.”
The Enforcement Directorate (ED), according to Chaudhary, is looking into many incidents of cryptocurrency fraud in which a few crypto exchanges have also been discovered to be implicated in money laundering. According to the ministry, as of December 14:
In these cases, proceeds of crime totalling Rs. 907.48 crores have been attached/seized, three people have been detained, and four complaints of prosecution have been lodged with the Special Court, PMLA.
Additionally, assets worth Rs. 289.68 crores ($35,046,152) have been seized under the Foreign Exchange Management Act of 1999 (FEMA). In addition, Zanmai Labs, which runs the cryptocurrency exchange Wazirx, and its director have received a Show Cause Notice from FEMA for transactions involving crypto assets worth Rs. 2,790.74 crores.
The minister also stated that investigations into 12 bitcoin exchanges for dodging the Goods and Services Tax had been opened (GST). The total amount recovered to date, including interest and penalties, is 110.97 crore rupees. In addition, four investigations have been closed, while eight cases are still being investigated. He gave the following table to Lok Sabha:
Updates to Parliament on Cryptocurrency Bill and Crypto Exchange Investigations from the Indian Government
In response to members of the Lok Sabha’s crypto inquiries, the Ministry of Finance released a table.
Chaudhary added clarification:
In India right now, cryptocurrency assets are not regulated. Crypto exchanges are not registered with the government.
In October, Nirmala Sitharaman, India’s finance minister, stated that the country intends to discuss cryptocurrency legislation with the G20 nations to create “a technology-driven regulatory framework” for cryptocurrencies. The G20 countries intend to develop a policy consensus on crypto assets for better global regulation, according to Ajay Seth, India’s secretary for economic affairs, who made the statement last week. During the ninth India-US, Economic and Financial Partnership conference last month, Sitharaman and US Treasury Secretary Janet Yellen discussed cryptocurrency regulation.
