India plays a prominent role in the global cryptocurrency market, with a large and growing number of crypto traders. However, its total crypto asset holdings still lag behind the United States. Crypto services in India currently operate under a partial regulatory framework, as cryptocurrencies have been regulated under the Prevention of Money Laundering Act (PMLA) since March 7, 2023. Earlier this year, several crypto companies faced regulatory pressure for failing to register with India's Financial Intelligence Unit (FIU). On December 16, 2024, discussions in the Indian Parliament highlighted ongoing efforts to create a comprehensive crypto regulatory framework. Lawmakers acknowledged the challenges posed by the decentralized nature of cryptocurrencies, emphasizing the need for international cooperation with foreign financial regulators to curb illicit activities, such as money laundering. While a discussion paper outlining the regulatory approach may be released, no specific timeline has been established. India's leaders have also showcased their efforts at global crypto regulation during the G20 summit. At present, Indian financial regulators are focused on developing a regulatory structure that balances investor protection with the need to foster growth in the crypto sector. However, challenges remain, particularly in ensuring full investor protection, given the decentralized nature of the market. The collapse of FIU-registered crypto exchanges like WazirX and Bitbns, which were affected by cyberattacks, has raised significant concerns. This has led many to question the rationale behind regulatory demands for registration and taxation of crypto companies while seemingly overlooking incidents that impact consumer trust and security.

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