Crypto Regulation in India ‘Coming Sooner Than Expected‘
Crypto influencer Kashif Raza recently posted on X that “crypto regulation in India is coming sooner”. This statement comes at a crucial time when investors of WazirX are grappling with the aftermath of a devastating hack.
Source: X
WazirX, a popular Indian crypto exchange, recently suffered a security breach resulting in a loss of $235 million. The incident has left thousands of investors in financial turmoil, with many unable to access their funds. In the absence of clear cryptocurrency regulations in India, these investors find themselves in a precarious situation with limited legal recourse.
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What’s the Current Status of Crypto Regulation in India?
Currently, India lacks a specific legal framework for cryptocurrencies. The government’s approach has been cautious and evolving. In 2018, the Reserve Bank of India (RBI) imposed a ban on banks dealing with crypto-related businesses, which was later overturned by the Supreme Court in 2020. Since then, the crypto industry in India has operated in a regulatory grey area.
In recent years, the Indian government has taken some steps towards regulation. In 2022, it introduced a 30% tax on profits from crypto transactions and a 1% Tax Deducted at Source (TDS) on all crypto transfers. However, these tax measures do not provide a comprehensive regulatory framework for the industry.
Indian Finance Minister: A Call for Crypto Tax Reform and Reduced TDSThe current state of India’s cryptocurrency taxation and TDS (Tax Deducted at Source) policies has been a topic of intense debate among investors and the wider financial community. As the digital asset market…
— Pushpendra Singh (@pushpendrakum) June 18, 2024
The lack of clear regulations has left WazirX users with few options to recover their lost assets. Some affected investors have taken to social media platform X to share their plight, with a few even threatening extreme measures, including suicide, out of desperation.
Raza’s Tweet Offers Hope To Investors
Amid this crisis, Raza’s tweet has offered a glimmer of hope to the beleaguered investors. His statement suggests that the Indian government might be closer to implementing a regulatory framework for cryptocurrencies than previously thought.
The potential for regulation has been a topic of discussion in India for several years. The Cryptocurrency and Regulation of Official Digital Currency Bill, which was expected to provide clear guidelines, has been delayed multiple times since 2021. The government has cited the need for global cooperation and consensus on crypto regulation as reasons for the delay.
Industry experts believe that proper regulation could provide much-needed protection for investors in situations like the WazirX hack. Regulations could potentially mandate security protocols, establish investor protection mechanisms, and create legal avenues for redressal in cases of fraud or security breaches.
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