November 5, 2021
A group of cryptocurrency exchanges and trade groups took out an ad taking up the entire front page of one of India’s top finance newspapers, calling on the government to provide regulatory guidance to the crypto industry.
- At the same time, the exchanges, which include WazirX, ZebPay, CoinDCX, CoinSwitch Kuber and others, committed in the ad in The Economic Times to complying with the Blockchain and Cryptocurrency Committee of India’s (BACC) self-regulatory code of conduct under the Internet and Mobile Association of India (IAMAI).
- The main features of the code include online know-your-customer (KYC) verification of all customers, checking for fraud, investor education, an audit trail of all transactions, grievance redressal and full compliance with law enforcement and tax authorities.
- The Indian government has been sitting on a crypto regulation bill for at least a year. Meanwhile, since the Supreme Court lifted the Reserve Bank of India’s two-year banking ban on crypto exchanges in March 2020, investment in crypto has soared.
- Initially, it looked like the Indian government would once again look to ban crypto but recently it’s been reported that the legislation would regulate crypto as an asset class like commodities. It’s likely the exchanges are hoping that their ad adds momentum to that movement.
- Tens of millions of Indians have invested $80 billion (INR 6 trillion) in crypto, according to the ad. Given these “staggering” numbers and “massive” growth potential, India needs a “transparent and regulated environment,” the group said in the ad.
- “The huge amount of Indian investor exposure to cryptocurrencies warrants quick action by the government on the regulatory front,” Prasad Rane, partner at Legaligence Strategic Consulting LLP, told CoinDesk.
- “The global anti-money laundering agency the Financial Action Task Force [FATF] has already identified crypto assets as a source of risk and recently published guidance to regulate the industry like banks,” Rane said. “Our government is behind the curve.”
- Indian investment in crypto has ballooned to $6.6 billion this year from $923 million last year, intelligence firm Chainalysis found in July.
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