Investor Money is India’s Top Concern as India Prepares for Crypto Bill

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As India prepares to introduce the much-anticipated Cryptocurrency and Official Digital Currency Regulation Bill 2021 in the winter session of Parliament starting on November 29, all eyes are on towards what will happen to the hard-earned money of Indian investors once the ban on all private cryptocurrencies goes into effect.

With around 15-20 million crypto investors and no details on the size of the Indian crypto market, a blanket ban is expected to shake up the entire crypto ecosystem.

A recent advertisement from the Blockchain and Crypto Assets Council (BACC), part of the Internet and Mobile Association of India (IAMAI) with industry players like CoinSwitch Kuber, CoinDCX, WazirX and Zebpay on board, claimed that Millions of Indians have invested over Rs 6 lakh crore in crypto assets to date – a figure which is highly questionable, as no one has any idea what kind of money is channeled through crypto exchanges.

Read also | Explained: How are cryptocurrencies regulated in countries around the world?

Following the announcement of an upcoming ban on all private cryptocurrencies in the Crypto Bill, 2021 erupted last week, several investors – mostly from a small town in India and including women – began pulling out their hard earned money from various cryptocurrencies. exchanges, which inundated them with lucrative ads promising wild profits in recent days.

According to experts, while a ban on private cryptocurrencies is a welcome step, the government must not only ensure that investors’ money is safe, but also trace the millions of dollars that have been funneled through crypto exchanges and platforms of which the competent authorities have no idea. .

A media report said on Saturday that more than Rs 4,000 crore of illegal transactions through cryptocurrency exchanges have been discovered by the Enforcement Branch (ED) in the past year.

“The crypto craze has reached Tier 2 and Tier 3 cities and the non-regulation of this Rs 6 lakh crore size market raises questions about the sovereign authority of the Indian government. Non-levying of GST in various layers of its transaction and not- Imposing an income tax with penalty already results in a huge loss to state and central government revenues, ”said Virag Gupta, cyber law expert based in New Delhi.

According to Jiten Jain, director of Voyager Infosec and leading cybersecurity expert, “Crypto as a currency should be banned, because the issuance of a currency is the sovereign right of a central government. However, people can own crypto as a commodity and the government should regulate and tax them properly.

Read also | Crypto Industry Strives to Standardize Ads: KYC Standards

Serious concerns have now been raised about the misuse of digital coins on the Dark Web for terrorist acts and drug trafficking by militant organizations, as well as money laundering and hawala-based transactions – this which poses a serious threat to national security and a great challenge for the security agencies in India.

According to Subhash Chandra Garg, India’s former finance secretary, the recently flourished cryptocurrency exchanges have deep business interests in mind, and making money is obviously the primary motive.

“These exchanges operate outside the framework of the country’s law and are desperate to be legitimized. After the total ban on private cryptocurrencies, if investors lose their hard-earned money, the government would be in a difficult position to respond to it. , “Garg had told IANS.

Amid the crypto debate in India, Sweden’s leading finance and environmental authorities have also called for an EU-wide ban on cryptocurrency mining, saying the risks for consumers are important because crypto assets are commonly used for criminal purposes, such as money laundering, terrorist financing, and ransomware payments.

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