India makes ownership of Bitcoin criminal offense - How to respond?

[Vishnu.Reang]

Turns out that the bill is much worse than we ever anticipated. Even the existing holders of cryptocurrency will be penalized, even if they agree to immediately liquidate their crypto assets.

https://www.livemint.com/market/cryptocurrency/get-ready-for-hefty-penalty-to-legalize-your-crypto-assets-11613064974027.html

The proposed cryptocurrency bill may allow holders of such currencies to exit the asset class before its anticipated ban but may put a heavy penalty on its conversion to a legal asset.

The government strategy is very simple. They have run out of money and now they want to confiscate wealth from successful people. From what I can understand from the article, the government is proposing a transition period, where the existing cryptocurrency users will be allowed to sell their assets. But here is a catch. The government is proposing a "heavy" penalty on those who doing so. In the end the penalty may work out to 50% to 75%. One the remaining amount, the income tax of up to 43% needs to be paid. So in the end, if someone is holding $100,000 worth of cryptocurrency, the government will take away $90,000 and leave the individual with around $10,000 in funds.

This is nothing but plain daylight robbery. I don't know what to say about those people who still support the criminals who run the government.

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[milesfull]

Soon other countries will do the same. We should be ready for it

[bryant.coleman]

Soon other countries will do the same. We should be ready for it

I have already explained about it here: https://bitcointalk.org/index.php?topic=5316416.msg56327803#msg56327803

What the Indian government is proposing is not just the prohibition of cryptocurrency, but also confiscation of wealth from the existing cryptocurrency users. As such, it is against the constitution. I hope the supreme court of India will nullify this measure, if it gets passed in the parliament.

And I don't think that other countries will follow such measure, because wealth confiscation is against democratic ideals. Forget democracies, even dictatorships such as those in Cuba and North Korea would think twice before ordering wealth confiscation.

The scenario in India is different, because there is a large group of largely illiterate and brainwashed followers of the ruling party who will stand by whatever policies they make. Most of these people live in slums and have a deep hatred towards successful people who have access to good quality living. Obviously they will support measures such as wealth confiscation. But I don't think that such measures can be introduced in any of the developed nations.

[Ucy]

That sounds like tyranny, and they are most likely overstepping their boundaries. Reminds me of a post I read about US making ownership of Gold criminal offense 30years ago or so. I guess If you dig up gold back then and keep it, you'll are considered a criminal?
I wouldn't bother too much if the Indians are limited from buying to much to prevent the devaluation of the Nation's fiat currency. But asking people not to own a currency/asset at all sounds like lawlessness and tyranny.

[Sithara007]

That sounds like tyranny, and they are most likely overstepping their boundaries. Reminds me of a post I read about US making ownership of Gold criminal offense 30years ago or so. I guess If you dig up gold back then and keep it, you'll are considered a criminal?
I wouldn't bother too much if the Indians are limited from buying to much to prevent the devaluation of the Nation's fiat currency. But asking people not to own a currency/asset at all sounds like lawlessness and tyranny.

So when they outlawed ownership of gold, did that worked? The answer is no. The same would happen this time as well. People would go to any extent to protect their wealth. The COVID 19 pandemic has given national governments an excuse to print banknotes without any limit and thereby reducing the value of these notes to less than that of toilet paper. Corporations such as Tesla are moving to Bitcoin and gold. If the government thinks that they can prevent this by threats and blackmail, then they are just a bunch of fools.

[Bitstar_coin]

Isn't this way too harsh for just owing a crypto? I can't believe having btc in your wallet will automatically tag you a criminal without actually committing any crime, I was expecting a more friendly approach from governments but it seems some of them are adamant, they rather wants to frustrate their youths who are the highest crypto patroniser,
Just few days ago the Nigerian government put a ban, why this government taking harsh laws towards crypto  

[DapanasFruit]

Soon other countries will do the same. We should be ready for it

I have already explained about it here: https://bitcointalk.org/index.php?topic=5316416.msg56327803#msg56327803

What the Indian government is proposing is not just the prohibition of cryptocurrency, but also confiscation of wealth from the existing cryptocurrency users. As such, it is against the constitution. I hope the supreme court of India will nullify this measure, if it gets passed in the parliament.

And I don't think that other countries will follow such measure, because wealth confiscation is against democratic ideals. Forget democracies, even dictatorships such as those in Cuba and North Korea would think twice before ordering wealth confiscation.

The scenario in India is different, because there is a large group of largely illiterate and brainwashed followers of the ruling party who will stand by whatever policies they make. Most of these people live in slums and have a deep hatred towards successful people who have access to good quality living. Obviously they will support measures such as wealth confiscation. But I don't think that such measures can be introduced in any of the developed nations.

I am sad to see this thing happening in India, a country I considered to be ahead a lot of miles in adopting modern technologies and adhering to democratic ideas enjoyed by many in other countries. India has the potential to be a big leader in the world of blockchain and technology yet they got some leaders who are afraid of the future of money and so they assumed that allowing legit cryptocurrencies to flourish can mean that the government is going to be left out. Banning is not the best solution and millions of Indian people can suffer due to this policy. Seems to me that those in the government are not that open-minded and they are not willing to have an honest dialogue with the emerging cryptocurrency industry in India. A sad development.

[btc78]

There was clarification from the finance minister (Nirmala Sitharaman), and yesterday she made it clear that any cryptocurrency that is not issued by the Reserve Bank of India will be illegal in India. So if there was any doubt on anyone regarding the upcoming ban, I hope those doubts are cleared by now. For the Indian cryptocurrency users, we need to think about our next course of action.

https://www.indiatoday.in/technology/features/story/is-india-going-to-ban-bitcoin-here-is-story-so-far-1767746-2021-02-10

The Indian government is closer than ever to impose a blanket ban on crypto-currency trading, mining and investments in the country. This will include the much talked about Bitcoin along as well as other popular crypto-currencies. A bill for the same has already been proposed and on Tuesday, Finance Minister Nirmala Sitharaman said in the Rajya Sabha that a high-level Inter-Ministerial Committee (IMC) has been constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose actions through which all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.

That is good clarification that it is not all the crypto currency but there is specifications .

I know that Bitcoin has been allowed by RBI right? so meaning BTC is not one of those who will be illegal .

I do not know why they do this, but it is their big mistake.

What ? issue has been on the run for long years now mate, the moment i enter this forum that banning Issue from RBI and the government is always been the problem of Crypto users in india.

[Sithara007]

I am sad to see this thing happening in India, a country I considered to be ahead a lot of miles in adopting modern technologies and adhering to democratic ideas enjoyed by many in other countries. India has the potential to be a big leader in the world of blockchain and technology yet they got some leaders who are afraid of the future of money and so they assumed that allowing legit cryptocurrencies to flourish can mean that the government is going to be left out. Banning is not the best solution and millions of Indian people can suffer due to this policy. Seems to me that those in the government are not that open-minded and they are not willing to have an honest dialogue with the emerging cryptocurrency industry in India. A sad development.

Some of the biggest names in technology are from India, and examples are Sundar Pichai and Satya Nadella. But the Indian government has historically taken a stance that is against technological innovations. The situation became worse ever since the right-wing government has elected in 2014. Some of their contributions have included banning porn, and taxing stock dividends at a rate of 43%. India is definitely a leader in terms of technology, but if the current government stays in power most of the skilled people would be forced to emigrate.

[pakhitheboss]

I am sad to see this thing happening in India, a country I considered to be ahead a lot of miles in adopting modern technologies and adhering to democratic ideas enjoyed by many in other countries. India has the potential to be a big leader in the world of blockchain and technology yet they got some leaders who are afraid of the future of money and so they assumed that allowing legit cryptocurrencies to flourish can mean that the government is going to be left out. Banning is not the best solution and millions of Indian people can suffer due to this policy. Seems to me that those in the government are not that open-minded and they are not willing to have an honest dialogue with the emerging cryptocurrency industry in India. A sad development.

Some of the biggest names in technology are from India, and examples are Sundar Pichai and Satya Nadella. But the Indian government has historically taken a stance that is against technological innovations. The situation became worse ever since the right-wing government has elected in 2014. Some of their contributions have included banning porn, and taxing stock dividends at a rate of 43%. India is definitely a leader in terms of technology, but if the current government stays in power most of the skilled people would be forced to emigrate.

We all are jumping to a conclusion here, that the Indian government will ban cryptocurrency completely.

Just to let you know the Bill needs to pass through both houses first. Then there will be a debate and after that, the crypto community in India still can take this issue to the Supreme court before the bill becomes a law.

It will take time and It is not so easy for a law to be formed in India

So, be patient and do not jump into any conclusions. India is still a democracy.

[Sithara007]

^^^  They are trying to fast-track the bill and introduce it as an ordinance. In that case, they don't need to put the bill for voting in both houses of the parliament. Three days back (on 11th February), the finance minister told media that she want to introduce the bill as soon as possible, for reasons best known to her. And about the last part, I am having my doubts whether India is a fully functioning democracy right now.

[pakhitheboss]

"Ordinance replacing Bills are brought before Parliament to replace an Ordinance, with or without modifications, promulgated by the President under article 123 of the Constitution of a subject." this is the definition.

Now, which existing ordinance is the government going to replace? As per my understanding, this is a bill because no such ordinance existed in India. I am not sure what you mean by democracy but just to clarify your doubt, democracy has four pillars and if one pillar is not functioning properly then there are three others that can rectify it.

[KuromaYoichi]

Turns out that the bill is much worse than we ever anticipated. Even the existing holders of cryptocurrency will be penalized, even if they agree to immediately liquidate their crypto assets.

https://www.livemint.com/market/cryptocurrency/get-ready-for-hefty-penalty-to-legalize-your-crypto-assets-11613064974027.html

The proposed cryptocurrency bill may allow holders of such currencies to exit the asset class before its anticipated ban but may put a heavy penalty on its conversion to a legal asset.

The government strategy is very simple. They have run out of money and now they want to confiscate wealth from successful people. From what I can understand from the article, the government is proposing a transition period, where the existing cryptocurrency users will be allowed to sell their assets. But here is a catch. The government is proposing a "heavy" penalty on those who doing so. In the end the penalty may work out to 50% to 75%. One the remaining amount, the income tax of up to 43% needs to be paid. So in the end, if someone is holding $100,000 worth of cryptocurrency, the government will take away $90,000 and leave the individual with around $10,000 in funds.

This is nothing but plain daylight robbery. I don't know what to say about those people who still support the criminals who run the government.

Private cryptocurrency issued by the state, so that's mean it's prohibited to own almost all crypto that exist right now right? Wow that's actually really harsh, banning is one thing but confiscating crypto assets? that's tyranny in my opinion. If they want to earn money from crypto realated income then they can tax it, no need for punishment on top of the heavy tax. Crypto holder should just hold their crypto until the the finalized bill is passed and decide what to do after that.

[bryant.coleman]

Private cryptocurrency issued by the state, so that's mean it's prohibited to own almost all crypto that exist right now right? Wow that's actually really harsh, banning is one thing but confiscating crypto assets? that's tyranny in my opinion. If they want to earn money from crypto realated income then they can tax it, no need for punishment on top of the heavy tax. Crypto holder should just hold their crypto until the the finalized bill is passed and decide what to do after that.

If the government had a conciliatory approach, then it should have done the same with other sectors as well, such as gambling. Despite repeated requests from the public, they have refused to legalize gambling or cannabis consumption. The same goes with cryptocurrency as well. They want to ban anything that they don't like. You know how stupid they can be, when porn is banned in the country. These people still have a 15th century mentality, and it is difficult to do reasoning with them, or their supporters. 

[MWesterweele]

They are too much, why did they doesn't allow people to use this kind of technology as long as they are liable to use it and has the capacity to use it? It is sounds unfair for me they should done other thing rather than this thing, I think you should follow the rules mate for now it could be hard to stop and wait for the next update for this rule and law but you should abide it in order for you not to punish by them, I am sure sooner or later they will let people to use it again.

[Sithara007]

Here are the latest news about the impending ban:

https://www.wionews.com/business-economy/india-mulls-bitcoin-ban-existing-investors-to-get-transition-period-363262

India mulls Bitcoin ban, existing investors to get transition period

India will go ahead with a complete ban on investment in cryptocurrencies, while providing existing investors a transition period to exit their holdings.

Seven million investors hold cryptocurrencies in India worth more than one billion dollars. The ban won’t be enforced overnight and cryptocurrency investors will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments. The proposed ban --- is part of a comprehensive bill on crypto and digital currencies. It may be introduced in the ongoing budget session of parliament.

https://economictimes.indiatimes.com/tech/technology/crypto-exchanges-experts-may-move-out/articleshow/80913360.cms

Crypto exchanges, experts may move out

Apprehensive that the coming bill on cryptocurrency will propose a blanket ban, CEOs of crypto exchanges and investors are fearing a drain of both talent and business from India. The crypto industry is expecting a brain drain similar to what happened in 2018 after the Reserve Bank of India directed banks to desist from dealing in any transactions involving cryptocurrencies. Blockchain experts rushed to regulated countries like Switzerland, Singapore, Estonia and the US, and an outright ban will have a similar effect, according to Mathew Chacko, partner at Spice Route Legal. He said blockchain innovation, which has a role to play in governance, data economy and energy, will come to a grinding halt in India.

The rich investors are planning to move out to other countries. It is the middle class which always fall victim to these stupid policies of the government, as they can't afford the huge expenses involved in getting a second passport.

[Ozero]

There was clarification from the finance minister (Nirmala Sitharaman), and yesterday she made it clear that any cryptocurrency that is not issued by the Reserve Bank of India will be illegal in India. So if there was any doubt on anyone regarding the upcoming ban, I hope those doubts are cleared by now. For the Indian cryptocurrency users, we need to think about our next course of action.

https://www.indiatoday.in/technology/features/story/is-india-going-to-ban-bitcoin-here-is-story-so-far-1767746-2021-02-10

The Indian government is closer than ever to impose a blanket ban on crypto-currency trading, mining and investments in the country. This will include the much talked about Bitcoin along as well as other popular crypto-currencies. A bill for the same has already been proposed and on Tuesday, Finance Minister Nirmala Sitharaman said in the Rajya Sabha that a high-level Inter-Ministerial Committee (IMC) has been constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose actions through which all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.

Well, this will be a tough time for cryptocurrency holders in India. The Indian government has been studying the possibility of legalizing cryptocurrency for a very long time, but in the end decided to ban its circulation. In this case, the people should take to the streets and express their protest against this decision. However, even if this does not lead to anything, then this government will also not last forever. To a large extent, everything will depend on how the leading states will treat the cryptocurrency.
On the other hand, we will have an experience of how effective a ban on the circulation of cryptocurrency in a separate, moreover large in territory and population, country can be.

[bryant.coleman]

Well, this will be a tough time for cryptocurrency holders in India. The Indian government has been studying the possibility of legalizing cryptocurrency for a very long time, but in the end decided to ban its circulation. In this case, the people should take to the streets and express their protest against this decision. However, even if this does not lead to anything, then this government will also not last forever. To a large extent, everything will depend on how the leading states will treat the cryptocurrency.
On the other hand, we will have an experience of how effective a ban on the circulation of cryptocurrency in a separate, moreover large in territory and population, country can be.

Being a regular visitor to India, I can assure that it is not going to work. There is a large section of the population which supports the ruling party and that is why the government is so confident about these measures. Their supporters will defend them no matter what sort of laws they bring. During the last couple of years, they have introduced many controversial laws, and the opposition can't do anything about it.

And another factor is that 1 or 2 million cryptocurrency users doesn't really matter, out of a population of 1.4 billion. The vast majority of the population lives in rural areas. 95% or more haven't even heard about Bitcoin. If the government claims that Bitcoin is used for terrorism and therefore they need to ban it, then the vast majority of the population will support the government move.

[ecnalubma]

This India hating Bitcoin is already a classic issue now. What can we expect from this country, how many times do they ban Bitcoin or cryptocurrency? People supporting crypto in India maybe quiet a few, they need right people in the government to stand for them and act as there voice. This FUD doesn’t work to the current market anymore, people are used to it already.

[Sithara007]

This India hating Bitcoin is already a classic issue now. What can we expect from this country, how many times do they ban Bitcoin or cryptocurrency? People supporting crypto in India maybe quiet a few, they need right people in the government to stand for them and act as there voice. This FUD doesn’t work to the current market anymore, people are used to it already.

Ordinary Indians are losing out as a result of the hostile stance of the government. When the news first came out, the prices in various Indian exchanges and P2P platforms went down by as much as 20%. A lot of investors either sold their coins, or cancelled plans to purchase more coins. And in the end this resulted in huge losses for them, as the exchange rates rocketed from $19,000 to $49,000. Indians are not benefiting from the current rally, as they don't want to take the risk and invest in BTC at this point.