In the Lok Sabha, the lower house of India’s parliament, the government of India has provided some updates on its crypto bill. In addition, the government has provided updates on ongoing inquiries into crypto exchanges in the country. According to the minister of state at the Ministry of Finance, cryptocurrency assets are, by definition, borderless. Therefore, international collaboration is required to prevent regulatory arbitrage in cryptocurrency markets.
Crypto Regulations and Bills Related Questions Answered by the Indian Government
In response to questions from Lok Sabha members, the Indian government answered two sets of questions about the cryptocurrency bill and its regulation.
Bhartruhari Mahtab, a member of Parliament, requested information from the Minister of Finance regarding the cryptocurrency bill. This bill was scheduled for presentation during the winter session of Parliament in 2021. He also requested the anticipated date and timeframe within which the cryptocurrency bill will be presented and then open for public input.
In response, Pankaj Chaudhary, Minister of State in the Ministry of Finance, responded without specifying a time period:
Due to the fact that crypto assets are, by definition, borderless, international collaboration is necessary to prevent regulatory arbitrage. In order for legislation to be effective, there has to be significant international collaboration regarding the assessment of risks and benefits and the development of common taxonomies and standards.
Furthermore, Mahtab requested the finance minister to specify which ministries or departments would be in charge of regulating cryptocurrencies and crypto tokens, as well as other types of virtual assets like non-fungible tokens (NFTs), decentralized applications (dApps), and real estate tokens.
In response, Chaudhary said:
Currently, the Ministry of Finance is in charge of crypto assets and the related ecosystem.
Parliament members also requested information on cryptocurrency exchanges under investigation
In addition, several other members of parliament have requested information regarding crypto exchanges under investigation by the government for money laundering and tax evasion.
The Minister stated that the Enforcement Directorate (ED) is investigating several cases involving crypto fraud and that a few crypto exchanges have also been implicated in money laundering. The Minister added that as of Dec. 14:
The Special Court of PMLA has seized and attached proceeds of crime amounting to Rs. 907.48 crores, arrested three individuals, and filed four prosecution complaints in these cases.
Additionally, assets valued at Rs. 289.68 crores ($35,046,152) have been seized under the Foreign Exchange Management Act 1999 (FEMA). Zanmai Labs, the operator of crypto exchange Wazirx, and its director have also been issued a Show Cause Notice due to transactions involving crypto assets worth Rs. 2,790.74 crores.
According to the minister, there have been investigations into GST evasion at 12 cryptocurrency exchanges. Including interest and penalties, 110.97 crore rupees have been recovered so far. Further investigation is underway in eight cases, and four cases have been closed. Here is the table he presented to the Lok Sabha:
A table provided by the Ministry of Finance in response to parliamentarians’ crypto questions.
|No. of Crypto||Quantum of evasion detected |
(Including interest and penalty)
|Further investigation is under process in 8 cases, and 4 cases closed on payment of tax along with interest and penalty.|
In addition, Chaudhary clarified:
There is no regulation of crypto assets in India at the moment. There is no registration process for crypto exchanges by the government.
Nirmala Sitharaman, the Indian finance minister, said in October that the government intends to talk to the G20 about crypto regulation. Ajay Seth, India’s economic affairs secretary, told the media last week that the G20 nations are working to come to a policy consensus on cryptocurrency assets in order to improve global regulation. Earlier this month, Janet Yellen and Nirmala Sitharaman discussed crypto regulation during the ninth India-U.S. Economic and Financial Partnership conference.
Shaktikanta Das, Governor of the Reserve Bank of India, and Jerome Powell, Chairman of the Federal Reserve, were present at the meeting. As Treasury Secretary, Janet Yellen was traveling to India for the first time.
Government officials were scheduled to introduce new cryptocurrency regulations during the Winter Session of Parliament, which began on November 29. For the second time, the bill was listed but deferred – the first time was in the Budget Session of Parliament last February.