IMF Official: Regulating Crypto Assets Is High on the Agenda for India

April 22, 2022 Bitcoin.com

Coinbase to invest in Indian crypto and Web3 amid tax regulation clarity

April 4, 2022 Coin Telegraph

Coinbase Ventures will conduct an in-person pitching event in Bengaluru to help accelerate India's financial inclusion goals via crypto and Web3 investments.

Coinbase Ventures, an investment arm of American crypto exchange Coinbase, shared a plan to invest $1 million in various Indian cryptocurrency and Web3 initiatives via an in-person pitching event.

In a blog post drafted while he was in India, Coinbase CEO Brian Armstrong revealed that the venture firm intends to tap into India’s software talent with the crypto and Web3 technologies and help accelerate India’s economic and financial inclusion goals.

Calling India’s cryptopreneurs!

Coinbase Ventures is partnering with @BuidlersTribe to host an in-person pitch day in Bangalore in April.

$1M+ is up for grabs, including $25k bonus grants provided by @BeliefDAO, and mentoring sessions with the best minds in crypto.
— Coinbase (@coinbase) March 21, 2022

On Apr. 8, the in-person pitch day will be hosted in Bengaluru in partnership with Buidlers Tribe, which will be further supported by Belief DAO to provide bonus grants up to $25,000. The rising interest of foreign investors in India’s crypto space can be attributed to the recent regulatory clarity brought forward by the controversial crypto tax law.

India’s crypto tax law requires — which has been effective since Apr. 1 — requires all Indian citizens to pay 30% of unrealized crypto gains as tax. Additionally, the investors will not be allowed to offset any crypto losses to compensate for the taxation.

When asked about the general notion about Web3 as a disruptor, Buidlers Tribe co-founder Pareen Lathia told Cointelegraph that Indian entrepreneurs are excited to take their firms global. Speaking about the impact of new tax law in attracting foreign investments, Lathia revealed that:

“Tax law is just one positive step. This is a paradigm shift and regulations will catch up.”

While the Indian Finance Minister Nirmala Sitharaman has previously shared her intent to rethink the crypto tax in the near future, Coinbase’s entry into the market has attracted over 110 applicants.

1. Chains ⛓️

44% projects are being built on @0xPolygon
11% projects are being built on @ethereum
11% projects are being built on @solana
5 projects are multi-chain! https://t.co/tofMDcr5pv
— Buidlers Tribe (@BuidlersTribe) March 27, 2022

According to Armstrong, Coinbase has previously invested $150 million in Indian crypto and Web3 companies and plans to onboard 1,000 employees in Coinbase’s Indian tech hub. Establishing regulations serve as a clear invitation to foreign investments, and Armstrong added:

“India is a magical place, and I believe crypto has a big future here. We’re excited to help build that future, and this event is an important step.”

Armstrong remains at the forefront of attaining regulatory clarity on cryptocurrencies in the United States. Over the past year, Coinbase overcame numerous regulatory hurdles put forth by the United States Congress and Securities and Exchange Commission. As a result, the company is expected to play a key role in regulatory discussions around crypto that will ripple across the globe.

The state government of Maharashtra in India started using Polygon blockchain technology to issue caste certificates as a part of the Digital India campaign.

The Maharashtra state government partnered with LegitDoc to roll out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

Indian Administrative Service (IAS) officer Shubham Gupta told Cointelegraph that the Indian government is always on the lookout to implement disruptive technologies that can help democratize citizen services:

“Web3 takes the concept of democratization to a whole new level, whereby, data/information can not only made openly sharable but can be made openly unfalsifiable.”

Indian state gov’t uses Polygon to issue verifiable caste certificates

March 29, 2022 Coin Telegraph

Certificates

In partnership with LegitDoc, the Maharashtra government is in the process of rolling out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

The Government of Maharashtra, one of India's state governments, has started issuing caste certificates over the Polygon blockchain to citizens residing in Etapalli village, Gadchiroli district, as a part of the Digital India campaign.

In partnership with LegitDoc, a blockchain-based application, the Maharashtra state government is in the process of rolling out 65,000 caste certificates to aid the process of delivering governmental schemes and benefits.

As cited by Indian Administrative Service (IAS) officer Shubham Gupta in an article co-authored by LegitDoc CEO Neil Martis, the caste certificate issuance via neutral web3 platforms aims to target 1.1 million economically challenged residents of the Gadchiroli district, with over 70% representing the tribal population.

*Caste certificate sample. Source: LegitDoc*

Furthermore, the verifiable certificates aim to deter forgery efforts by bad actors to falsely claim government-provided benefits for the under privileged. The duo also spoke about the importance of Web3 protocols in protecting the general public against deplatformation — both financially and non-financially:

“In Web3, anyone can be part of the public blockchain network, but no single entity can control the network, thereby reducing the deplatformation risk by both internal and external actors.”

*Caste certificate verification portal. Source: LegitDoc*

As a part of the initiative, the LegitDoc platform fetches selective data from the government-run MahaOnline portal and uploads it to the Polygon proof-of-stake (PoS) blockchain. The system then generates a QR code and certificates, which can be verifiable by various government departments.

For the first time in 65000 caste certificates have been issued on @0xPolygon network by the Maharashrta government.

A big thank you to @MartisNeil founder @LegitDocIndia for convincing and executing the project.

Thank you to our Young dynamic IAS officer @ShubhamGupta_11 pic.twitter.com/t00BZgWlrD
— Kashif Raza (@simplykashif) March 28, 2022

The Maharashtra government has previously implemented an Ethereum-based credentialing system to provide tamper-proof diploma certificates as a measure to avert document forgery.

Earlier this quarter, Indian finserv giant Axis Bank made use of a government-backed blockchain platform to issue a financial contract between two domestic businesses.

As Cointelegraph reported, Secured Logistics Document Exchange (SLDE) was developed by India’s Ministry of Commerce and Industry to serve as a digital document exchange platform that uses blockchain-based security protocols for data security and authentication.

The SLDE blockchain platform was used to a letter of credit, which guarantees payment upon conditions, between ArcelorMittal Nippon Steel India and Lalit Pipes & Pipes Ltd. Axis Bank president of wholesale banking products Vivek Gupta added:

“This transaction reinforces Axis’ commitment to lead the digitization in Transaction banking space.”

Five key takeaways from the official Indian crypto ads guideline

February 23, 2022 Coin Telegraph

The new guidelines regulate the size and language of disclaimers while prohibiting portraying the market as a ‘get rich quick scheme.’

The Advertising Stands Council of India (ASCI) released a set of 12 guidelines for promotions and advertisement of virtual digital assets (VDA), including cryptocurrencies, on Wednesday.

The chief advertising watchdog has developed the new guideline after extensive consultation with the stakeholders of the crypto ecosystem as well as the government, ASCI said. The advertising guidelines also mark the first legal framework related to the digital asset market in the country at a time when the government is yet to finalize the crypto bill.

The new crypto advertising framework is set to come into effect starting April 1, the same date when the infamous 30% tax on crypto is set to come into effect. Let us look at five key takeaways from the guidelines that would detainment to the future of content in advertisements of the crypto firms.

All crypto advertisements post-April 22 must add a disclaimer to explain crypto and NFT products are unregulated and "can be highly risky." The disclaimer must be shown in all dominant languages.
It is not allowed to compare a crypto asset to the regulated assets in the ad.
Crypto ads must refrain from using "currency," "securities," "custodian," and "depositories" while referring to their products or services.
Crypto advertisements shouldn't portray their products as a solution to money problems in any way or form.
Crypto advertisements talking about profitability must contain clear, accurate, sufficient and updated information.

The advertising council also specified print size for disclaimers and how it should be broadcasted via different social mediums. Siddharth Sogani, CEO of blockchain analytical firm Crebaco told Cointelegraph:

“This is a great move by the concerned regulators and it is always good to have disclaimers that offer better insight into the market rather than being propagated as “get rich quick scheme”.

Sogani went on to add that the new crypto advertisement guidelines also hint at better crypto frameworks in the future and show that the government is taking in the viewpoint of stakeholders to regulate better.

Aggressive crypto advertisements were the theme of Indian media for the majority of the last two quarters of 2021, owing to the bull market and Indian crypto exchanges seeing a great influx of new users. This led to the Delhi high court notifying government to formulate appropriate guidelines and disclaimers in July last year.

India’s finance minister waiting for consultations to decide whether to ban or regulate crypto

February 11, 2022 Coin Telegraph

Ban

The country's finance minister admitted to not having enough information to make a fateful call.

Yet another statement by a top Indian official suggests that regulatory uncertainty around the status of digital assets in the country will persist in the near term.

Responding to the general discussion of the 2022–23 Union Budget at Rajya Sabha, the upper chamber of India’s bicameral parliament, finance minister Nirmala Sitharaman stated that she was not going to “legalize or ban” cryptocurrency at this moment. The minister added that “Banning or not banning will come subsequently,” when the ministry reviews input from consultations.

Sitharaman also mentioned that the state has “the sovereign right to tax” income that citizens derive from cryptocurrency transactions. Furthermore, the government’s capacity to levy crypto taxes is separate from the issue of legally recognizing the asset class. This argument echoes the statement made earlier in the week by the head of India’s tax authority, who maintained that the plan to tax digital assets does not necessarily mean the legalization of trading.

India has recently become a hotbed for major regulatory news, with rumors of a potential ban stirring up the global crypto space in late 2021. At this point, it appears that the immediate threat has blown over, with the bill containing the ban proposition left out of the parliament’s agenda for the current session. While continuing to weigh its options on crypto assets, the Indian government has been making strides towards introducing a central bank digital currency, or CBDC, later in 2022 or in 2023.

Indian couple celebrates blockchain wedding with NFT vows, digital priest

February 5, 2022 Coin Telegraph

Coin Telegraph

Anil Narasipuram, the husband, was initially motivated by blockchain marriages done in other countries.

A young couple from India used nonfungible tokens (NFTs) to digitize their love for each other till eternity over the Ethereum (ETH) blockchain.

The recently married couple from Pune, India, Shruti Nair and Anil Narasipuram decided to take their court marriage to the next level by hosting a blockchain wedding. According to Anil, the husband:

“I read some articles on how people in other countries were doing blockchain marriages and it motivated me.”

Other prominent crypto entrepreneurs to follow the trend include Rebecca Kacherginsky, Coinbase’s staff product designer.

Most people get married in a place of religious worship, on a beach, or in the mountains. Peter (@_iphelix) and I are NOT most people. We got married on the #blockchain. 1/7 pic.twitter.com/2ExexrlLbZ
— Rebecca Kacherginsky (@rgoldilox) April 2, 2021

As a part of the Indian blockchain wedding, the couple was accompanied online by Anoop Pakki, who was responsible for minting the NFT — a.k.a. the digital priest.

"We read out the vows and after receiving the blessings of our digital priest, I confirmed the transaction to transfer the NFT to my wife's digital wallet," said Anil explaining the "The transaction took a few minutes (and about $35 in ETH gas fees) after which we were pronounced husband and wife by our digital priest!"

Indian couple Anil and Shruti. Source: LinkedIn

The couple unanimously read the vow, “We won’t make any big promises, but we will do everything we can to make this work. Through all our disagreement and conflict, we hope to grow our understanding of each other and ourselves. We don’t expect to be the whole village for each other, but we will be by each other’s side, hand in hand, walking through this adventure, together.”

The wedding vow, which was in the form of a digital image was then minted as an NFT by the digital priest on the OpenSea platform. The description of the NFT read:

“This contract is between Shruti Sathian Nair, born March 17, 1988, and Anil Mohan Narasipuram, born October 11, 1986. The parties to this agreement are hereby declared husband and wife, on Nov 15 2021 and to have to hold, in sickness and in health, for now and in perpetuity.”

Indian finance minister Nirmala Sitharaman announced the launch of a central bank digital currency (CBDC) along with a 30% crypto tax by 2022–23 during the Union Budget 2022.

As Cointelegraph reported, Sitharaman said that the CBDC launch will provide a “big boost” to the digital economy along with the possibility of a more efficient and cheaper currency management system. Her proposal suggested:

“Any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deductions in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition.”

Crypto tax doesn’t legalize trading, says Indian tax department chief

February 2, 2022 Coin Telegraph

Coin Telegraph

The Indian tax department head said crypto taxation will help the department evaluate the exact depth of the digital asset market.

The head of the Central Board of Direct Taxes (CBDT) in India said the recent announcement of a 30% tax on crypto holdings doesn’t necessarily make the crypto trade legal in India.

The finance minister of India announced a 30% tax on crypto holdings during the budget session on Feb. 1, triggering several headlines on the lines of “India legalizes crypto” However, CBDT chief JB Mohapatra aimed to debunk these misconceptions.

Mohaptra in a post-budget presser said that the new crypto tax would help the income tax department measure the depth of the digital currency market in the country. He also stressed that imposing a tax on the nascent crypto market doesn’t necessarily legalize its trade in the country. He explained:

“The crypto trade or the digital assets transactions do not ipso facto become legal or regular just because you have paid taxes on that.”

LIVE | Digital assets to be taxed at 30%. But what are digital assets? #Cryptos & #NFTs? Why no #tax relief for the middle class? Watch JB Mohapatra, Chairman, CBDT and Vivek Johri, Chairman, @cbic_india @NayantaraRai #BudgetWithETNOW #Budget2022 https://t.co/ZToktkeag7
— ET NOW (@ETNOWlive) February 1, 2022

The tax department chief added that the legality of the crypto trade could be determined only after a clear national framework is introduced in the parliament. However, he justified the tax imposition claiming it would help the department to track illicit activities associated with digital assets. He also advocated for regulating the crypto market to track the flow of money going in and out of the digital asset ecosystem.

The Indian government has been working on crypto regulatory frameworks since 2019 but has been only recently introduced a crypto bill. Some crypto exchange operators called the 30% tax progress, stating that the government has come a long way from its early days when it was looking to impose a blanket ban and jail terms for crypto-related violations.

Thailand recently quashed its 15% tax proposal on crypto transactions after facing backlash from retail market operators. South Korea also delayed its 20% tax proposal due to a lack of clarity on crypto regulations.

Deloitte: 82% of Indians Surveyed Plan to Invest in Crypto Once Government Provides Regulatory Clarity

February 1, 2022 Bitcoin.com

Indian taxman recovers $6.62M from WazirX for evading tax on commission

January 1, 2022 Coin Telegraph

Indian taxman recovers .62M from WazirX for evading tax on commission

Binance

Government officials from CGST Mumbai Zone recovered the funds from crypto exchange WazirX after detecting a GST evasion of $5.43 million on trade commissions.

Indian crypto exchange WazirX has reportedly paid over $6.6 million (49.2 crore rupees) following non-payment of Goods and Services Tax (GST) on trade commissions. The total recovery includes the pending tax of $5.43 million (40.5 crore rupees), the interest and a penalty for non-payment.

Government officials from the Central GST and Central Excise committee (CGST Mumbai Zone) recovered the funds from the crypto exchange after detecting a GST evasion of $5.43 million on the commissions. A typical GST fraud involves creating fake invoices without actually moving the goods between the seller and the buyer.

Officers of CGST Mumbai East comm'te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai
— CGST Mumbai Zone (@cgstmumbaizone) December 30, 2021

According to local media Economic Times, the tax department detected that WazirX uses its in-house WRX tokens for commissions, which were distributed by Zanmai Labs. Further investigation revealed that the crypto exchange missed out on paying 18% tax on the total tokens issued based on its market price.

The investigators revealed that WazirX paid GST on the 0.2% commission it charges users for making trades with local currency i.e. the rupee, clarifying:

“But in cases where the trader opts for transaction in WRX coins, the commission charged is 0.1% of trading volume and they were not paying GST on this commission.”

It is also important to note that WazirX and WRX tokens are owned by Binance, the world’s biggest crypto exchange in terms of the trading volume. According to a Zanmai Labs spokesperson, the non-payment of tax was related to the misinterpretation of GST rules:

“We voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax.”

WazirX CEO Nischal Shetty previously told Cointelegraph about the importance of regulatory clarity for retail adoption. He also warned that an overnight regulation may harm the progress of the crypto ecosystem and leave open loopholes for bad actors:

“There is a $2.5-trillion market out there, and it is not going to wait for any nation to come on board. I’ve been tweeting ‘#IndiaWantsCrypto’ for over 1,000 days with the sole objective of having crypto regulation in India.”

Day 1000

What a milestone for Indian Crypto!

With #IndiaWantsCrypto my mission has been:

- Bring positive crypto regulation in India
- Spread right information about Crypto

Lakhs of people have joined this campaign

Let’s continue our mission

Jai Hind #IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) July 28, 2021

While the concept of GST is fairly new in the region, the government of India has previously agreed to show leniency to defaulters and fraudsters — typically settling such cases with a monetary penalty and a lower probability of jail time.

WazirX has not yet responded to Cointelegraph’s request for comment.

In an attempt to help the Indian government decide crypto laws, the Confederation of Indian Industries (CII) proposed to treat cryptocurrencies as securities of a special class.

A report released by the non-government trade association showed the CII proposes to formulate new regulations around the nascent crypto market instead of regulating them under existing securities law.

As Cointelegraph reported, the CII recommended a special provision of income tax and GST laws, which will treat cryptocurrencies as an asset class for tax purposes unless specifically treated as “stock in trade“ by a participant.

SEBI chief warns Indian mutual funds on investing in cryptocurrency offerings

December 29, 2021 Coin Telegraph

Coin Telegraph

While the regulatory environment for cryptocurrencies in India is currently murky, the country has already witnessed an exponential rise in crypto popularity.

The Chairman of the Securities and Exchange Board of India (SEBI), Ajay Tyagi, urged mutual funds to avoid investing in crypto-related assets as the government considers new cryptocurrency rules. Speaking at a press conference on Tuesday, Tyagi advised firms to refrain from investing in funds linked to crypto assets until there is clarity on the policy and regulatory framework.

“Those who have invested in mutual funds, — in companies related to crypto-assets or foreign firms through fund-of-funds (FOF) — my thinking is that till we get clarity on its (crypto's) policy, businesses should not make such investments,” said the SEBI chairman.

While the regulatory environment for cryptocurrency in India is currently murky, the country has already witnessed an exponential rise in its popularity. It's also unclear if crypto investments come with any tax obligations in the country.

Tyagi's remarks come following the recent event involving an asset management firm (AMC), Invesco Mutual Fund. Despite Sebi's approval, it delayed its blockchain fund last month owing to legislative uncertainty.

There have been talks about cryptocurrency being discussed in Parliament during the winter session recently. The talks gained further momentum following a parliamentary standing committee on finance's meeting with cryptocurrency stakeholders to identify possible opportunities and challenges that may occur when it comes to crypto financing and investment.

The Indian government had formally planned to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for debate in the parliament during its current winter session. The bill, however, does not appear among the bills that India's lower house will consider as it concludes the winter session.

Meanwhile, Indian Prime Minister Modi has been increasingly vocal regarding cryptocurrencies in 2021. During the recent Sydney Dialogue, Modi urged democratic nations to collaborate in order to make the most of cryptocurrencies and blockchain technology. He also warned against their malicious use.

indian crypto