Government of India Updates Parliament on Cryptocurrency Bill and Investigations of Cryptocurrency Exchanges – Bitcoin News Rule

The Indian government has provided some updates on its cryptocurrency bill and investigations into cryptocurrency trading in the Lok Sabha, the lower house of the Indian parliament. “Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage,” said the minister of state at the finance ministry.

Government of India Responds to Questions About Crypto Bill and Regulation

The Indian government responded on Monday to two sets of questions about cryptocurrency and its regulation from various members of the Lok Sabha, the lower house of India’s parliament.

Member of Parliament Bhartruhari Mahtab asked the finance minister to state “the current status of the cryptocurrency bill, which was due to be presented during the winter session, 2021, of the Parliament” and “the timeframe within which the bill of cryptocurrency law would have been presented and subsequently be open to public contributions”.

Pankaj Chaudhary, Minister of State in the Finance Ministry, responded without giving a specific timeline:

Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation on the subject can only be effective with significant international collaboration on the assessment of the risks and benefits and on the evolution of the taxonomy and common standards.

Mahtab also asked the finance minister to indicate which ministry and/or department would regulate cryptocurrencies and crypto tokens and which would regulate other types of “virtual digital assets”, such as non-fungible tokens (NFTs), decentralized applications (dApps), real estate tokens and other blockchain-based assets.

Chaudhary simply replied:

Currently, the policy regarding crypto assets and related ecosystem is with the Ministry of Finance.

Members of Parliament are also asking for details on cryptocurrency exchanges under investigation

Another set of questions from several other members of parliament ask for “details of cryptocurrency exchanges that are being investigated by the government for money laundering and tax evasion cases.”

Chaudhary explained that the Enforcement Directorate (ED) “is investigating several cases related to crypto fraud in which some cryptocurrency exchanges have also been found to be involved in money laundering”. The minister explained that as of December 14:

Proceeds of crime amounting to Rs. In these cases 907.48 crore was garnished/seized, three people were arrested and four prosecution complaints were filed in the special court, PMLA.

Also, under the Foreign Exchange Management Act 1999 (FEMA), assets in the amount of Rs. 289.68 crore ($35,046,152) was seized. In addition, a filing notice has also been issued to Zanmai Labs, which operates cryptocurrency exchange Wazirx, and its director under FEMA for transactions involving Rs. 2,790.74 crores.

The minister added that 12 cryptocurrency exchanges were being investigated for evading the Goods and Services Tax (GST). Rs 110.97 crore including interest and penalties have been recovered so far. In addition, eight cases are under further investigation and four cases have been closed. He provided Lok Sabha with the following table:

Government of India Updates Parliament on Cryptocurrency Bill and Cryptocurrency Exchange Investigations
Table provided by the Ministry of Finance in response to questions about cryptocurrencies from Lok Sabha members of parliament.

Chaudhary also clarified:

Currently, crypto assets are not regulated in India. The government does not register cryptocurrency exchanges.

India’s finance minister, Nirmala Sitharaman, said in October that the government plans to discuss cryptocurrency regulation with G20 countries to establish “a technology-led regulatory framework” for cryptocurrencies. Ajay Seth, economic affairs secretary of India, said last week that the G20 nations aim to build a political consensus on crypto assets for better global regulation. Last month, US Treasury Secretary Janet Yellen and Sitharaman discussed cryptocurrency regulation during the ninth meeting of the India-US Economic and Financial Partnership.

What do you think about the Indian government’s approach to cryptocurrency? Let us know in the comments section below.

Kevin Helms

An Austrian business student, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests are in Bitcoin security, open-source systems, network effects, and the intersection of economics and cryptography.

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