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How Crypto World Puts Pressure on Government - India Case

Bitcoin fever had been on the rise in India for the past few months. However, the Indian Government’s recent high-handed approach against high net-worth cryptocurrency investors has created a state of unrest amongst the people.

“Every three months, our volumes [Bitcoin trading] have been doubling, and that trend is continuing” said Saurabh Agrawal, Co-founder of ZebPay, a leading cryptocurrency exchange in India. A statement by Vivek from Coinsecure said it all, “There are high net-worth individuals, trading companies, and corporate entities exploring this space. Experienced stock traders and analysts who study the charts are interested in investing because of the surge in prices”. And this enthusiasm by the stakeholders is also developing into pressure on the Indian government.

Recently, Bivas Chatterjee, a Calcutta based lawyer, who also served as the nodal office in West Bengal, filed a PIL (Public Interest Litigation) for the regulation of Bitcoin. “There is an urgent need to frame a joint panel or a group of committees with experts from various fields to ensure the legality and accountability of cryptocurrencies,” said Chatterjee. Such a PIL, demanding a regulatory framework and laws for Bitcoin-like currencies in India, is not the only one in India.

Moreover, another interesting step has been taken by the cryptocurrency startups across the country. An online petition gathered fifteen-thousand signatures from cryptocurrency stakeholders. This petition was circulated by Indian cryptocurrency startups and seems to be gaining momentum to witness some positive action by the government.

It seems that the government and the Indian authorities are looking for an optimum solution to tackle the non-fiat blockchain currencies. However, if it decides to go with a total ban, the action may backfire as it did for China. China banned Bitcoin a while ago. The result? The cryptocurrency exchanges and sales have developed a peer-to-peer nexus, and the Chinese government has lost total control over the crypto market. Hopefully, the Indian authorities will take this into account before declaring anything about the Blockchain currencies.

The ITD’s action of levying a tax on cryptocurrency trade gains, and the Indian government’s silence on the matter give us enough to anticipate future options. It is highly likely that cryptocurrency trading will be controlled by a regulatory framework and laws. It is about time the new policies are released to the people. Pressure from corporates, investors, startups, and individuals to regulate blockchain currencies will hopefully bring out the much needed positive framework by the government of India.

Moreover, as reported by Cryptonews.com, the Reserve Bank of India is now more positive towards the crypto world.

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Background

The Indian government has accepted that a total of sixteen cryptocurrency exchanges are currently operating in India. Moreover, cryptocurrency exchanges claim that 2,500 investors are entering this market every day in the country. But a recent blow by the government for Bitcoin investors has rendered the option of regulating digital non-fiat currencies uncertain.
Recently, the income tax department (ITD) raided nine cryptocurrency exchanges in the country. Two million investors came under the ITD’s radar. Out of these, four to five lakh (a unit in the Indian numbering system equal to one hundred thousand) net worth investors will be served notices by the department. Why? For potential ‘tax-evasion’ and money laundering activities under the guise of Bitcoin trading.
The ITD now plans to extract tax money from these cryptocurrency investors and even penalize them. It is expected that the crypto traders will have to pay ‘thirty percent capital gains tax.’ And those who fail to pay the tax and declare their investment in the financial year will have to pay a penalty of fifty-two hundred percent, in addition to twelve percent interest annually on the penalty amount.

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