India may disallow Indians from trading crypto on foreign exchanges
India might be an inch closer to legitimizing cryptocurrency trading in the country but it may prohibit investors to trade them on foreign platforms.
A recent cabinet note shared by the government of India states the new crypto bill will be regulated by the Securities and Exchange Board of India (SEBI). It labels cryptocurrencies as crypto-assets” and might restrict Indians from trading cryptos on foreign platforms.
As per NDTV, the cabinet note circulated suggests that a cut-off date will be declared for crypto holders in India, allowing them to disclose their holdings and bring them under locally-regulated crypto exchanges.
India may restrict crypto trading on foreign exchanges
The new cabinet documents also notify that SEBI will keep a close watch on the cryptocurrency advancement in India. Crypto holders in India are said to be relieved, but further clarification is awaited since the bill is yet to be tabled in the parliament.
Among the various litigations proposed are penalizing the violation of clauses to be met with strict punishment—including imprisonment for one and a half years—followed by a heavy penalty of upto Rs.5 crores ($667,500). NDTV also reports that violations involving sponsoring terror crimes will be evaluated under provisions of the Prevention of Money Laundering Act.
According to local publication Livemint, India is home to more than 10 million crypto investors and its citizens are rapidly showing interest in cryptocurrency trading. WazirX, one of India’s largest crypto exchanges by trading volumes, has recently reported increased user activity on its platform.
India’s crypto concerns
Indian Finance Minister Nirmala Sitharaman had earlier expressed her qualms on cryptocurrency trading in India, such as the possibility of increased fraudulent activities.
This is a risky area & not in a complete regulatory framework. No decision was taken on banning its advertisements. Steps are taken to create awareness through RBI&SEBI. Govt will soon introduce a Bill: FM Nirmala Sitharaman on Cryptocurrency during Question Hour in Rajya Sabha pic.twitter.com/WwopPdBQHg
— ANI (@ANI) November 30, 2021
A tweet posted by Prime Minister Narendra Modi on November 18 had also sparked speculation of a “ban” after he urged nations to protect their youth from “getting spoiled” by cryptocurrencies.
Take crypto-currency or bitcoin for example.
It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth: PM @narendramodi
— PMO India (@PMOIndia) November 18, 2021
India is also gearing up to take responsive measures to restrict misleading ads on crypto, however, a concrete decision highlighting such measures is yet to be announced by the government.