Holding unregulated crypto asset may attract punishment in India

[avikz]

 December last year, the government had set up a panel headed by Garg to examine a framework for regulating crypto currencies. Other members of the panel include Securities and Exchange Board of India chairman Ajay Tyagi and Reserve Bank of India (RBI) deputy governor BP Kanungo.

The committee is likely to submit its report by December, defining the broad contours of a regulatory framework for crypto assets and virtual currencies.

The panel is in the last stages of deliberation and will come out with the government’s approach covering the entire spectrum.

The government is of the view that unregulated crypto assets should not be allowed to move into the financial system. The Garg-panel is likely to recommend appropriate amendments in existing laws, defining the punitive measures for those found holding illegal crypto assets.

News source: https://www.moneycontrol.com/news/business/economy/holding-unregulated-crypto-assets-like-bitcoin-in-india-could-attract-punishment-3047991.html

Banking ban has already weakened the crypto scene in India and the court trial is getting delayed every single time. Now if they start taking punitive actions, it will put the last nail on the coffin of cryptos in India!

What ways can we take if such useless bills become a law in December? Any thoughts??

[AltEvangelist]

If it becomes a law, this amounts to full fledged banning. And on top of this, they are mulling enforcing a state-backed crypto: https://qz.com/india/1418897/after-strangling-bitcoin-india-may-launch-its-own-cryptocurrency/
While they keep calling it crypto, it will probably be a CBDC which is basically fiat in digital form. And the panel which set out to "study and research" crypto's effects in India constitutes RBI, SEBI and Ministry of Finance officials. All 3 bodies have been anti-crypto from the start. Not sure if Govt enforces a crackdown, there is much that can be done except for an appeal to the Supreme Court. Though, even that seems like a losing battle considering the petition filed by crypto exchanges against the banking ban is still awaiting a hearing date from the Court after the last set of hearings got over several weeks back.

Banking ban has already weakened the crypto scene in India and the court trial is getting delayed every single time. Now if they start taking punitive actions, it will put the last nail on the coffin of cryptos in India!

We can't afford to be left behind. Again. I remember commenting on this thread earlier this year about Kazakhstan banning crypto (https://bitcointalk.org/index.php?topic=3232750) without even realising that we could be in their shoes before the year ends  

I think the cryptosphere, in general, will also lose out if a billion people are suddenly cut out of crypto completely. Other countries could take cue from this and start banning crypto too. This is now everybody's battle and should raise a hue and cry across the world.

[bryant.coleman]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

[gentlemand]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

It wasn't very practical to demonetise high denomination notes thus boning a large amount of the population up the chocolate whizzway. They did it anyway. Since they didn't flinch at the idea of doing that I see no reason why they wouldn't do this too.

[supermine]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

It wasn't very practical to demonetise high denomination notes thus boning a large amount of the population up the chocolate whizzway. They did it anyway. Since they didn't flinch at the idea of doing that I see no reason why they wouldn't do this too.

Maybe they won't ban the cryptos in the near future because in India there will be parliament election in the next year so normally the ruling parties won't take any negative decisions at this time which means the decision from the government about cryptos maybe will be in pending until the election results announced.

[Theb]

1. Cryptocurrencies cannot be use as payment method and is only meant for trading
2. Banks are prohibited to entertain cryptocurrency related transactions with their local exchanges
3. Attempting to screen cryptocurrencies and block unregulated ones

It looks like my suspicions are right after all, they are clearing the way in their market as India also plans to have their own state-issued cryptocurrency. The RBI is actually shaping the cryptocurrency scene in their country hoping for their own cryptocurrency to thrive in the market with no competition. But the way I see it is they are making their market less appealing to investors so I do hope their plan will backfire towards them.

[jhongzjhong]

A lot of people in India using bitcoin, even here there are some people here that comes from India but they are still working just to hunt crypto as well, I think their government has nothing to do on this situation because people keep using bitcoin just like trading on investing. So what crypto there that regulated? But I think that is the same crypto regulated to them or unregulated.

[1Referee]

1. Cryptocurrencies cannot be use as payment method and is only meant for trading
2. Banks are prohibited to entertain cryptocurrency related transactions with their local exchanges
3. Attempting to screen cryptocurrencies and block unregulated ones

It looks like my suspicions are right after all, they are clearing the way in their market as India also plans to have their own state-issued cryptocurrency. The RBI is actually shaping the cryptocurrency scene in their country hoping for their own cryptocurrency to thrive in the market with no competition. But the way I see it is they are making their market less appealing to investors so I do hope their plan will backfire towards them.

The most realistic scenario is that governments in general take a snapshot of their current financial system, and create one crypto/token for every fiat unit in circulation. It's basically a tokenized form of fiat money, but one that offer more usability for their economy, but directly also more power to the state.

India has been hammering down on anything it doesn't like in the last decades, so it's not something purely related to crypto currencies. In the end, we can only fall back on rumors and vague articles claiming that India is going to do this or that; we will only find out what they are up to once they finally announce it themselves and actually turn words into action.

In the end, India isn't very different from China in the way that they are trying to scare off the mass; they know they can't stop everyone, but if they can keep 75% of their population in check it's more than worthwhile for them. The other 25% can't be stopped no matter what you do.

[bryant.coleman]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

It wasn't very practical to demonetise high denomination notes thus boning a large amount of the population up the chocolate whizzway. They did it anyway. Since they didn't flinch at the idea of doing that I see no reason why they wouldn't do this too.

Banning crypto is not like banning old banknotes. It is much more complex. First of all, you can't exchange Indian banknotes without the permission of the government as it is the central bank that issues them. So if you hold on to your banknotes after a certain date, they will become worthless. The case with crypto is different. It will not become worthless if the Indian government bans it.

[veleten]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

It wasn't very practical to demonetise high denomination notes thus boning a large amount of the population up the chocolate whizzway. They did it anyway. Since they didn't flinch at the idea of doing that I see no reason why they wouldn't do this too.

Banning crypto is not like banning old banknotes. It is much more complex. First of all, you can't exchange Indian banknotes without the permission of the government as it is the central bank that issues them. So if you hold on to your banknotes after a certain date, they will become worthless. The case with crypto is different. It will not become worthless if the Indian government bans it.

crypto won't become worthless, but the government can introduce huge fines for individuals
and exchanges in India won't process any transactions , also their banks will not allow conversions
so it is pretty much possible to make life very difficult for cryptousers in India
but once again, this has been dragging for at least a year, there is no definite decision on the cryptocurrencies
the hearing has been postponed, the government is sitting on the fence as to  ban it, regulate it or introduce its own cryptocurrency

[avikz]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

I too believe that the step is not practical in any way, but it is still at a drafting stage and nothing has been finalized yet! But there may be no imprisonment involved. They will probably suggest for hefty fines and confiscation of unregulated assets, nothing more!

Maybe they won't ban the cryptos in the near future because in India there will be parliament election in the next year so normally the ruling parties won't take any negative decisions at this time which means the decision from the government about cryptos maybe will be in pending until the election results announced.

I really hope so but the issue is that the crypto community is very small in size here! That won't make any impact to the election result. The current ruling government is busy with religious matters and trying to create unrest within the "yet to be conquered" states! So banning crypto will not be a problem for them due to the small size of the community in India.

[squatter]

This step is not very practical and there are millions of crypto users in India. Are they going to jail all of them? If the government goes ahead with something like this, then they will face a lot of outcry from the public as well.

I too believe that the step is not practical in any way, but it is still at a drafting stage and nothing has been finalized yet! But there may be no imprisonment involved. They will probably suggest for hefty fines and confiscation of unregulated assets, nothing more!

Maybe that's the end goal. Thinking about cryptocurrency confiscation reminds me of the Gold Reserve Act of 1934, where private possession of gold was outlawed and US gold investors were forced to sell it to the Treasury.

Not a bad way to build national Bitcoin/cryptocurrency reserves, if you think about it.

[BitHodler]

The most interesting aspect of these discussions is that we westerners think we know everything (because everything we read is true, duhh) while I never see anyone from India or China actually explain the situation.

It may be that it's heavily being discussed in their native language on this forum, but it would be a welcome change for once to have some valuable input on these subjects from people who actually live there.

The situation around India and Russia hasn't changed much in the last couple of years. It's always we're planning to do this or that, but nothing ends up happening. I rather see them do something to back up their claims.

China at least turned words into deeds. It didn't work out in our favor, but they at least came in action.

[squatter]

The most interesting aspect of these discussions is that we westerners think we know everything (because everything we read is true, duhh) while I never see anyone from India or China actually explain the situation.

It may be that it's heavily being discussed in their native language on this forum, but it would be a welcome change for once to have some valuable input on these subjects from people who actually live there.

The OP is apparently from India and was asking for our opinions...

I doubt there's much to explain as the law hasn't been amended and there are few official statements in the media. The government is apparently waiting for an RBI report on digital currencies to be released before doing anything.

[avikz]

The most interesting aspect of these discussions is that we westerners think we know everything (because everything we read is true, duhh) while I never see anyone from India or China actually explain the situation.

It may be that it's heavily being discussed in their native language on this forum, but it would be a welcome change for once to have some valuable input on these subjects from people who actually live there.

The OP is apparently from India and was asking for our opinions...

I doubt there's much to explain as the law hasn't been amended and there are few official statements in the media. The government is apparently waiting for an RBI report on digital currencies to be released before doing anything.

Correct! I am indeed from India and really worried about the future of cryptos in my country. Even though nothing has been officially announced but the government doesn't seems to be positive towards cryptos. While a court case is ongoing, SEBI and RBI (Regulators of stock market and Banking system) was asked to produce their view on cryptos by the court. The government is awaiting those responses from these regulators and in the meantime, asked the Law Commission to prepare a draft which can be produced later on.

The things can take positive direction, but the chance for negative direction is much more prominent! 

[magneto]

I mean, they may for sure pass this bill somehow. Not surprising with the climate in which cryptos are already currently existing in India right now.

But the thing is, they don't have any enforceability.

They could try take down the holding of unregulated crypto assets, and since they're not actively regulating any one that I know of, pretty much all decentralised cryptocurrencies are going to be under this umbrella. But how will they ever persecute people for holding these assets? It's simply not feasible, they could take away the exchanges but P2P trading will still be present. They're much better off regulating the scene instead of trying to ban everything.

[veleten]

The most interesting aspect of these discussions is that we westerners think we know everything (because everything we read is true, duhh) while I never see anyone from India or China actually explain the situation.

It may be that it's heavily being discussed in their native language on this forum, but it would be a welcome change for once to have some valuable input on these subjects from people who actually live there.

The OP is apparently from India and was asking for our opinions...

I doubt there's much to explain as the law hasn't been amended and there are few official statements in the media. The government is apparently waiting for an RBI report on digital currencies to be released before doing anything.

Correct! I am indeed from India and really worried about the future of cryptos in my country. Even though nothing has been officially announced but the government doesn't seems to be positive towards cryptos. While a court case is ongoing, SEBI and RBI (Regulators of stock market and Banking system) was asked to produce their view on cryptos by the court. The government is awaiting those responses from these regulators and in the meantime, asked the Law Commission to prepare a draft which can be produced later on.

The things can take positive direction, but the chance for negative direction is much more prominent! 

negative approach is more than likely
especially seeing the news like this: https://cointelegraph.com/news/police-arrest-indian-crypto-exchange-co-founder-for-unregistered-illegal-bitcoin-atm
they arrested him for setting up a "not licenced bitcoin ATM" , speaks volumes about how crypto friendly the government is at the moment
although they can always make an u-turn , it is not decided just yet
I heard rumours  that some states are researching blockchain based methods of payments and even eyeing their own crypto currencies

[milewilda]

The most interesting aspect of these discussions is that we westerners think we know everything (because everything we read is true, duhh) while I never see anyone from India or China actually explain the situation.

It may be that it's heavily being discussed in their native language on this forum, but it would be a welcome change for once to have some valuable input on these subjects from people who actually live there.

The OP is apparently from India and was asking for our opinions...

I doubt there's much to explain as the law hasn't been amended and there are few official statements in the media. The government is apparently waiting for an RBI report on digital currencies to be released before doing anything.

Correct! I am indeed from India and really worried about the future of cryptos in my country. Even though nothing has been officially announced but the government doesn't seems to be positive towards cryptos. While a court case is ongoing, SEBI and RBI (Regulators of stock market and Banking system) was asked to produce their view on cryptos by the court. The government is awaiting those responses from these regulators and in the meantime, asked the Law Commission to prepare a draft which can be produced later on.

The things can take positive direction, but the chance for negative direction is much more prominent! 

negative approach is more than likely
especially seeing the news like this: https://cointelegraph.com/news/police-arrest-indian-crypto-exchange-co-founder-for-unregistered-illegal-bitcoin-atm
they arrested him for setting up a "not licenced bitcoin ATM" , speaks volumes about how crypto friendly the government is at the moment
although they can always make an u-turn , it is not decided just yet
I heard rumours  that some states are researching blockchain based methods of payments and even eyeing their own crypto currencies

We cant really say that it would go negative all the way which theres still a chance since they are still on neutral side.I agree on the fact that anytime they can make a u-turn
towards on possible decisions that they would made as long as they pleases.

You cant really say to be positive if you would able to hear up these kind of headlines.
https://cointelegraph.com/news/cryptocurrency-illegal-in-india-says-trade-organization-head

[Alex_Zi]

How and why? Just don't talk about it anywhere and use vpn. You are just holding in long term and not trading.

[jademaxxiss012]

This will be good so that people or the community will not be able to get into scam crypto that are now in the phase of collecting funds. Just take and example about the team working on ETHL that scam everyone who invested in the project. They were not lucky because team had dissappeared together with their money.