The Lok Sabha, India's lower house of parliament, has released a statement about the government's Crypto law as well as investigations into Cryptocurrency exchanges. Since Bitcoin assets are inherently borderless, the minister of state for finance has emphasized that international collaboration is required to avoid regulatory arbitrage. The Indian government has responded to two sets of questions from Lok Sabha, or lower house, members about Cryptocurrencies and their regulation.

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What is Cryptocurrency?

There is a wide variety of names for Crypto. Without any doubt you are familiar with Bitcoin, Litecoin, as well as Ethereum, three of the most popular digital currencies. Bitcoin and other Cryptos are gaining traction as viable substitutes for traditional virtual payment methods. You must learn about what Cryptos are, the dangers associated with utilizing them, and how you can safeguard your investment prior to you changing your regular cash into Bitcoin. Cryptocurrencies are a sort of digital money developed via the use of encryption techniques as a means of exchange. Cryptos are both a medium of exchange and a kind of digital accounting because of the underlying encryption technology. A Crypto wallet is a digital wallet that stores and secures digital money. Those wallets may be either web-based services or locally installed programs on your PC or mobile device. Your private encryption keys which verify your identification as well as relate to your Bitcoin are stored in wallets.

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Bhartruhari Mahtab, a member of parliament, recently asked the minister of finance to provide an update on the current status of the Cryptocurrency bill, which was due for being tabled during the winter session, 2021 of the Parliament, as well as "the timeline in which the Crypto bill will be discussed as well as consequently enter for general populace inputs. Due to the global nature of Crypto assets, the prevention of regulatory arbitrage calls for international cooperation. Thus, in order for any regulation on the issue to be successful, there must be substantial global cooperation in assessing the dangers and advantages, as well as the development of an uniform taxonomy as well as criteria.

The regulatory framework will apply to all blockchain-based assets, including NFTs, dApps, real estate tokens, and others. To learn more about the Bitcoin exchanges that are being investigated for laundering money and tax violations, other lawmakers have posed various questions. Several Cryptocurrency exchanges have indeed been suspected of financial fraud, and the Enforcement Directorate (ED) is now investigating these allegations of fraud. The entire amount of assets confiscated is Rs. 289.68 crores or $35 million. The operator of the Cryptocurrency exchange Wazirx, Zanmai Labs, and the chairman of the firm have been served with a notification for dealings in Bitcoin assets worth Rs. 2,790.74 crores or $337 million.

Parliamentarians Request Crypto Exchange Investigation Details

The information of Crypto exchanges which are under investigation by the government for money laundering and tax evasion charges, as asked in another series of questions by several other parliament members. In these instances, the Special Court, PMLA has attached and confiscated proceeds of crime totaling Rs. 907.48 crores, detained three people, and filed four Prosecution Complaints. 

The government says it has looked at 12 Bitcoin exchanges for possible GST fraud (GST). After adding in the interest and fines, the total amount collected is 110.97 crore rupees. A small number of instances of Bitcoin exchanges evading GST has been uncovered. Nirmala Sitharaman, India's finance minister, said in October that her country would want to discuss Cryptocurrency regulation with G20 countries in order to develop a technologically-driven legal framework for Cryptocurrencies. Last week the G20 nations want to agree on a Crypto asset policy in order to bolster international regulation. Sitharaman as well as United States Treasury Secretary Janet Yellen addressed Cryptocurrency regulation during last month's ninth India-US Economic and Financial Partnership summit.

Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.