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Dark web money laundering and Crypto’s future in India

The use of crypto assets and cryptocurrencies actually present a very difficult situation for the law enforcement agencies to track down the attribution of a particular cyber act from the Dark Net…reports Nishant Arora

As we navigate through the debate on crypto’s future in India, mere imposing a 30 per cent tax on digital assets is not enough as money laundering and hawala-based transactions are growing significantly via cryptocurrencies on the Dark Web, putting India’s national security at risk, warn experts.

A Supreme Court bench observed last week that offence of money laundering is a more “serious and heinous crime than murder” as it hampers the entire economy.

Even non-fungible tokens (NFTs) are now prone to money laundering. According to a report by Blockchain data platform Chainalysis, a small but growing portion of activity on NFT marketplaces could be attributed to money laundering.

“While money laundering in physical art is difficult to quantify, we can make more reliable estimates of NFT-based money laundering thanks to the inherent transparency of the Blockchain,” the report said last week.

According to legal and cyber law experts, the crypto ecosystem is becoming a fertile ground for cyber criminals.

“This is so as these crypto-assets and cryptocurrencies are all based on Blockchain and, therefore, are now being extensively used on the Dark Web for the purposes of perpetuating various cyber-criminal activities,” Dr Pavan Duggal, a seasoned Supreme Court advocate and a cyber law expert, told.

Bitcoin and other cryptocurrencies have become the de-facto currency on the Dark Web.

The use of crypto assets and cryptocurrencies actually present a very difficult situation for the law enforcement agencies to track down the attribution of a particular cyber act from the Dark Net.

“This entire Blockchain-enabled tech is going to present a huge amount of challenges for nations, including India,” said Duggal.

While clearing some air on taxation regarding digital assets, the absence of a detailed Crypto Bill is making the overall situation even harder to assess especially on the illegal use of cryptocurrencies, feel experts.

New Delhi-based cyberlaw expert Virag Gupta said that as Web 3.0 unfolds, crypto assets will gain tremendous traction.

“It will change the landscape of financial frauds and crimes since digital assets are safe haven for criminals. Digital assets can be misused by drug traffickers, militant organisations, hawala operators and money laundering players. It poses a serious threat to national security and huge challenges to the security agencies in India,” Gupta told.

India is not prepared for the new wave of Blockchain-based cyber crimes.

“Not only is money laundering going to massively increase but more significantly, the cryptocurrencies are also going to be used for cyber terrorism and cyber radicalisation,” said Duggal.

Cyber security expert Jiten Jain said that despite the government levying 30 per cent tax on digital assets including NFTs, the crypto/NFT market will boom and a lot of companies may attempt to scam innocent people who do not have much technical knowledge by showing them a mirage of hefty gains.

Another headache for the Indian law enforcement agencies is that the coverage of crypto-based tech crimes under the Indian cyberlaw is hardly existing.

“We have to realise that if we do not take effective appropriate steps fast, this crypto-based tech is going to be extensively used by terrorists for the purpose of targeting the sovereignty, security and integrity of India,” warned Duggal.

It is time that the legal frameworks need to be appropriately amended so as to enable the coverage of crypto or Blockchain-based technology and its misuse.

According to Prime Minister Narendra Modi, democratic nations should work together on cryptocurrencies to ensure it does not end up in the wrong hands.

“Take cryptocurrency or Bitcoin for example. It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth,” he said during a virtual keynote address at the Sydney Dialogue organised by the Australian Strategic Policy Institute last November.

Over Rs 4,000 crore of illegal transactions via cryptocurrency exchanges were unearthed by the Enforcement Directorate (ED) in India in the last one year, reports said in the same month last year.

Grave concerns were raised over the misuse of digital coins on the Dark Web for terror acts and drugs trafficking by militant organisations, and for money laundering and hawala-based transactions — posing a serious threat to national security and a big challenge to the security agencies in the country.

“After the Union Budget 2022-23, top officials have cautioned the investors about the risks involved but ignored risks from underworld operations and the money-laundering syndicate,” said Gupta.

The time is ripe to come up with more holistic approach in this regard so that India can not just take the best benefits out of the crypto-based technology but also have appropriate enabling legal frameworks to effectively regulate the misuse of blockchain based tech for the purposes of committing cybercrimes and cyber security breaches, said experts.

ALSO READ-Survey shows demand for regulatory focus on cryptocurrency

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Survey shows demand for regulatory focus on cryptocurrency

Besides, more than 75 per cent of the respondents feel that the Budget should focus on green energy, Data Privacy Bill and public credit registry initiatives…reports Asian Lite News

A pre-Budget expectations survey showed a growing demand for increasing regulatory focus on the cryptocurrency sector.

As per the Grant Thornton Bharat survey, nearly 79 per cent of the respondents feel that Budget FY23 should focus on regulating cryptocurrencies and NFTs.

Besides, more than 75 per cent of the respondents feel that the Budget should focus on green energy, Data Privacy Bill and public credit registry initiatives.

“The market survey clearly demonstrates the expectation for the government to be forward-looking by focusing on initiatives around evolving risks, that help strengthen stability and growth of the financial services ecosystem,” said Vivek Iyer, Partner-Financial Services, Grant Thornton Bharat.

According to the survey, 8 out of 10 respondents think green energy should be a priority sector.

“Around 78 per cent of the respondents feel that green energy should be included within the definition of priority sector for channelising credit to a domain that will need a high level of investments,” the survey report said.

“With focus on financial inclusion and neo-banking, around 77 per cent of the respondents feel that the Data Privacy Bill needs to be passed,” it added.

The respondents also voted for fiscal stimulus measures to mitigate the damages caused by the ongoing Covid-19 pandemic, but stood against moratoriums to be provided by the banking system, which reflects an underlying recovery sentiment.

ALSO READ-Britain cracks down on misleading cryptocurrency ads

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Britain cracks down on misleading cryptocurrency ads

The UK authority plans to bring crypto-assets within the scope of financial promotions legislation….reports Asian Lite News

The government on Tuesday joined a slew of nations in cracking down on misleading cryptocurrency ads to protect consumers.

The country has joined Spain, Singapore and India in an effort to reign in cryptocurrency advertisements that promise wild returns.

The UK Treasury published a consultation response, saying that proposed legislation will also provide the UK financial watchdog, the Financial Conduct Authority (FCA), powers to regulate the crypto market more effectively.

“Around 2.3 million people in the UK are now thought to own a crypto-asset with their popularity rising – but research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying. This poses a risk that these products could be mis-sold,” the Treasury said in a statement.

The UK authority plans to bring crypto-assets within the scope of financial promotions legislation.

It means the “promotion of qualifying crypto-assets will be subject to FCA rules in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to,” said the UK Exchequer.

“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims,” said Rishi Sunak, Chancellor of the Exchequer.

“We are ensuring consumers are protected, while also supporting innovation of the crypto-asset market”.

The decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions.

Spain earlier Singapore and India, stressing that the advertising of crypto-assets must be clear, balanced, fair and explain risks to the public.

Spain’s National Securities Market Commission issued new guidelines, to come into force from February 17, that mandates the following warning to be placed on all crypto ads: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost”.

The aim, said the Spanish watchdog, is to ensure that the advertising of the products offers true, understandable and non-misleading content, and includes a prominent warning of the associated risks.

Earlier, Singapore warned cryptocurrency and digital token providers not to promote or advertise their digital tokens via various media platforms to the general public.

In new guidelines, the Monetary Authority of Singapore (MAS) said that digital payment token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore.

The Indian government in November last year raised concerns over crypto ads promising wild returns.

Indian crypto players bombarded the public with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The much-awaited ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, did not make it to the table during the Winter Session of Parliament amid growing concerns over the misuse of digital coins on the Dark Web for terror acts and drugs trafficking by militant organisations, and for money laundering and hawala-based transactions.

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Google Cloud teams up with CryptoWire

The Mumbai-based CryptoWire will also explore Google Cloud’s advanced solutions including smart data analytics, machine learning, and artificial intelligence to deliver a superior customer experience…reports Asian Lite News

TickerPlant, a subsidiary of 63 moons technologies limited, today announced its collaboration with Google Cloud for the development of the CryptoWire eco-system, catering to all stakeholders of crypto and the blockchain industry on a common platform.

As an exchange neutral global platform, CryptoWire aims to simplify the digital asset class, blockchain technology, its industrial application and empower enthusiasts and professionals to make informed business decisions by offering deep insight and leading-edge knowledge.

CryptoWire’s state-of-the-art knowledge portals, CryptoTV and Crypto University will provide technology and knowledge-intensive global intervention in crypto asset and blockchain ecosystem to enable seamless operations and convergence of all applications for participants to make informed investment decisions and enable industry usage of the blockchain.



Talking about the partnership with Google Cloud, TickerPlant Managing Director and CEO Jigish Sonagara said, “The sheer pace at which crypto and blockchain markets have moved clearly meant that we needed a technology partner which can help us scale in real-time. Working with Google Cloud, we can provide access to people across the world with well-crafted information with speed and precision in a rapidly changing environment and ensure a meaningful approach to address the information lacuna.”

TickerPlant will tap Google Cloud’s scalable, reliable, and high-performance data management infrastructure to build and expand CryptoWire’s applications, as well as leverage its innovative networking capabilities for video streaming, content delivery, smart business execution, and opportunity convergence.

Google Cloud India Managing Director Bikram Bedi said, “We are excited to provide the secure and scalable cloud infrastructure to innovative businesses like TickerPlant as it accelerates and scales access to blockchain and cryptocurrency information with CryptoWire, and to supporting them as they develop new products and offerings to create value for customers and users.”

In addition, the Mumbai-based CryptoWire will also explore Google Cloud’s advanced solutions including smart data analytics, machine learning, and artificial intelligence to deliver a superior customer experience.

TickerPlant COO Rushabh Shah said, “The convergence of Google’s Cloud network with CryptoWire, CryptoTV and Crypto University has created a new multi-faceted global growth frontier to be fully utilized by economies, industries, stakeholders, new generation entrepreneurs, and professionals.”

On Monday this week, CryptoWire, a global crypto super app that is a special business unit of TickerPlant, launched India’s first index of Cryptocurrencies – IC15 to empower knowledge on crypto and blockchain ecosystem.

The IC15 is a rule-based broad market index by market capitalisation and tracks and measures the performance of the top 15 widely traded liquid cryptocurrencies listed on leading crypto exchanges of the world.

Notably, Bitcoin, Ethereum, XRP, Bitcoin Cash, Cardano, Litecoin, Binance Coin, Chainlink, Polkadot, Uniswap, Dogecoin, Solana, Terra, Avalanche, and Shia Inu are the constituents of IC15.

Last month, global financial content provider TickerPlant unveiled its own cryptocurrency super application, which is intended to be a single destination for cryptocurrency enthusiasts to get information about real-time prices, the latest news, data, and charts. It will even provide courses related to cryptocurrencies. The super app is available for both Android and iOS devices and has a web browser platform too.

ALSO READ: India’s Crypto Dilemma

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India’s Crypto Dilemma

While the Reserve Bank of India (RBI) wants a blanket ban on cryptocurrencies, the government remains in a confused state of mind…writes Nishant Arora

The Cryptocurrency and Regulation of Official Digital Currency Bill 2021, seeking to prohibit all private cryptocurrencies in India, was set to be tabled in the Winter Session of Parliament that began on November 29. But the Bill did not make it to the table — second time in a year — as the chorus around the legality of digital coins and how to safeguard investors’ money grew louder.

Grave concerns have now been raised over the misuse of digital coins on the Dark Web for terror acts and drugs trafficking by militant organisations, and for money laundering and hawala-based transactions — posing serious threat to national security and a big challenge to the security agencies in India.

While the Reserve Bank of India (RBI) wants a blanket ban on cryptocurrencies, the government remains in a confused state of mind.

From “all windows on cryptocurrencies will not be closed” to “no proposal to recognise Bitcoin as currency”, and “regulating cryptocurrency will have to be a collective effort”, Finance Minister Nirmala Sitharaman and her team is yet to make up their mind as to how to deal with this emerging situation, especially at a time when several countries like China, Bangladesh, Russia, Egypt, Morocco, Qatar, Turkey and Vietnam have banned or prohibited/restricted cryptocurrencies.

Will India finally see a fruitful Crypto Bill, after inserting global knowledge into its clauses as being sought by the government, next year?

According to Subhash Chandra Garg, former Finance Secretary of India and a key figure behind drafting the original Bill, crypto businesses and assets (built on the Blockchain cryptography technology in decentralised databases), including stable-coin currencies, are expanding fast in the world.

“India, though not quite deep into developing crypto platforms like Ethereum or in creating crypto-businesses, has acquired a fancy for crypto-assets of different types. This fascination started with Bitcoin and has now expanded to many other crypto-assets (loosely referred to as crypto-currencies),” Garg told IANS.

Garg sees this fascination continuing in 2022 as well.

“Although, if there is a big crash in crypto-asset prices, which is inevitable sooner or later, Indian investors might bolt from crypto-stables, but only after their noses get bruised,” he warned.

Organisations globally were forecast to spend nearly $6.6 billion on Blockchain solutions this year, an increase of more than 50 per cent compared to 2020, according to the International Data Corporation (IDC).

Blockchain spending will continue to see strong growth throughout the 2020-2024 forecast period with a five-year compound annual growth rate (CAGR) of 48 per cent and reaching nearly $19 billion in 2024.

The deployment of Blockchain technology for cross-border settlement will drive significant cost savings for banks, rising from $301 million in 2021 to $10 billion in 2030 — a whopping 3,300 per cent growth in cost savings, according to a report from Juniper Research.

From an industry perspective, banking leads the way in Blockchain spending, followed by process manufacturing and discrete manufacturing and IT services and business services.

Given its pool of tech talent and early adoption, India will have a crucial role to play in the Blockchain-based financial world order.

“Blockchain-cryptography technology is brilliant and full of promise and the businesses and assets being built thereon are quite valuable. However, there is no good way at present to assess the true value of crypto-assets and businesses. Present prices reflect the euphoria of this potential,” Garg noted.

“Indian entrepreneurs might also be able to unscramble this technology by then and start building good crypto-Blockchain technology service businesses. That would be the beginning of true crypto adoption in the country,” he added.

Amid the growing adoption around Blockchain, the cryptocurrency exchanges have recently mushroomed with deep business interests in mind.

According to experts, the government must not only ensure that investors’ money is safe, but also trace millions of dollars that have been routed via crypto exchanges and platforms that the relevant authorities have no clue about.

A media report said in November that over Rs 4,000 crore of illegal transactions via cryptocurrency exchanges have been unearthed by the Enforcement Directorate (ED) in the last one year.

“The crypto craze has reached Tier 2 and 3 towns and non-regulation of this market of Rs 6 lakh crore size is raising questions on the sovereign authority of the Government of India. Non-levy of GST in various layers of its transaction and non-imposition of income tax with penalty is already causing huge loss to the state and Central government’s revenues,” said New Delhi-based cyberlaw expert Virag Gupta.

The Indian government faces a tough road ahead on Crypto in 2022, and taking the right decision will have to be a collective one.

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Seductive crypto ads leave Indian investors in dilemma

India has seen a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc…reports Nishant Arora

 “Kya aapke portfolio mein crypto hai?” If you have read such advertising lines recently — and now watching crypto ads as you surf through IPL 2021, YouTube and various social media platforms — make sure you hold on to your hard-earned money for a while.

Indian crypto players are bombarding people with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The ball is currently in the court of the Finance Ministry and the Reserve Bank of India (RBI). A cryptocurrency bill is expected in the winter session and till the whole picture is cleared, investing in cryptocurrencies can be a dangerous move, warn legal experts.

“Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks,” is a thin line at the end of the advertisements, not visible to many people who have started investing via various crypto exchanges.

According to Dr. Pavan Duggal, a seasoned Supreme Court advocate and a cyber law expert, few players are asking Indian investors to invest in cryptocurrencies, primarily because there is a big legal vacuum that exists in the country.

“India has still not made up its mind as to how it wants to deal with cryptocurrencies. These are not legal tender in India. As per the judgment of the Supreme Court of India, the Reserve Bank of India is the nodal statutory authority to deal with all aspects pertaining to cryptocurrencies. However, more work needs to be done in this area,” Duggal told IANS.

If we look at cryptocurrencies as mere electronic records, they could be brought under the ambit of legality under Section 4 of the Information Technology Act, 2000. However, there is a lack of appropriate capacity building and awareness among the Indian investors about legal capabilities and nuances of cryptocurrencies.

“The government cannot be a mute spectator while open calls are being made asking Indian investors to invest into cryptocurrencies. Without appropriate homework on the legalities of cryptocurrencies in India, merely prohibiting players from asking Indian investors to invest crypto currencies would also not work,” Duggal elaborated.

India has seen a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc.

Within 15 months of commencing operations in India, CoinSwitch Kuber is India’s largest crypto exchange with more than 10 million users. Of the total 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.

Homegrown crypto exchange Unocoin has launched deposits via UPI wallets in the Indian currency for a faster top-up to buy and sell Bitcoins and other cryptocurrencies on the platform.

“There is still uncertainty among the prospective users regarding the usage of cryptocurrency in comparison to real money. We want all our users to have the ease of trading or exchanging on our platform,” said Sathvik Vishwanath, CEO and Co-Founder, Unocoin.

According to a report by IT industry’s apex body Nasscom, there are 15 million retail investors in India investing in the cryptotech space.

New Delhi-based cyberlaw expert Virag Gupta said that several emerging sectors within the digital economy do not have an established legal framework and regulatory network.

“Cryptocurrency is a unique area, since it attracts concurrent regulation by the Ministries of Law, Finance and Commerce; alongside the RBI and the SEBI. Nonetheless, certain regulatory needs may be addressed using the IT Act and taxation may be enabled through a notification by the Ministry of Finance,” Gupta told IANS.

A legal endorsement by the RBI and legislation passed by the Parliament may further pave the way for lawful trading.

“It is a misconception to believe that a conducive regulatory environment will harm the crypto currency sector. Rather, to cement a certain future, detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta suggested.

Otherwise, the entire sector may be susceptible to uncertain government intervention “such as measures employed by the Chinese government which have led to loss of trust, investments, and overall destruction of the market”.

China’s central bank announced last month that all transactions of cryptocurrencies are illegal, effectively banning digital tokens such as Bitcoin, Ethereum and Solana etc.

When Bitcoin crossed $50,000 again last week, Shivam Thakral, CEO, BuyUcoin, said there has been a paradigm shift in the investment patterns across the globe which is underlined by the data shared by crypto exchanges from time to time.

“India’s middle-class population is willing to explore digital assets for creating long-term wealth to fulfil their goals, which may not be possible through any other asset class,” Thakral said.

However, it is possible that the gullible Indian investors would invest in crypto currencies, only to find that their business interests have been prejudicially impacted.

“This is a golden opportunity for the Indian government to explore mechanisms of how it can ride the tide of crypto-currencies and also draft enabling legal frameworks to regulate crypto-currencies,” said Duggal.

To cement a certain future, “detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta added.

(Nishant Arora can be reached at nishant.a@ians.in)

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UK bans major crypto exchange Binance

Binance has until June 30 to confirm that it’s honoring the FCA’s demands, citing Financial Times, Engadget reported…reports Asian Lite News.

The UK’s Financial Conduct Authority has banned the major crypto exchange Binance from conducting regulated activity in the country, including Binance Markets Limited and its parent Binance Group, the media reported.

The watchdog didn’t say just why it blocked Binance but noted that an “imposition of requirements” kept Binance from operating.

Binance has until June 30 to confirm that it’s honoring the FCA’s demands, citing Financial Times, Engadget reported.

According to the report, in the past, it said it took regulatory obligations “very seriously” and was “committed” to honouring the rules wherever it operated.

Binance is one of the largest crypto exchanges on the planet, with locations around the world and an industry-leading trading volume of about $2.46 trillion as of May 2021.

The FCA’s crackdown could not only limit trading in a major market but hurt the company’s reputation. It’s not clear how easily Binance can address its situation, but it’s under more than a little pressure to act quickly.

Binance told Engadget this shouldn’t have a direct effect on activity through its main website.

Binance Markets Limited is legally separate and has “not yet launched” its UK business, the company said.

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