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WazirX CEO: Ban Crypto to Promote Money Laundering

wazirx, india, crypto, ban

The Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019 has been drafted and has started circulating in all the relevant departments, that is, the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA). All these departments have approved the ban on the “sale, purchase and issuance of all types of cryptocurrencies’.

As reported earlier, the crypto communities in India revolted against this and petitioned to the government for seeking clarification on crypto regulation. In addition, it seems that positive regulation of cryptocurrencies would decrease cases of money laundering. The proper framework of cryptocurrency regulation would perhaps make it subsequently easier to trace and terminate the illegal laundering of money and tax evasion.

Nischal Shetty, the CEO of  WazirXIndia, a platform for crypto exchange, stated that:

Ban crypto to promote money laundering; Regulate crypto to prevent money laundering

As per the bill, usage of virtual currencies would impose an agonizing 10 year jail time. These harsh penalties make it seem that the authorities want to completely remove the concept of digital tokens from India. However, it is still unclear whether this bill will be passed as a law. The outright ban of cryptocurrencies, however, seems unlikely as it will serve as a potential hindrance to the technological progression of India.

WazirX CEO talks about consequence of crypto ban in India

Nischal Shetty has been a staunch supporter of cryptocurrencies through his IndiaWantsCrypto campaign. He has time and again spoken about the importance of the industry to keep up with the technological revolution. He said:

The objective of this campaign is to be heard by our law makers. India needs to be at the forefront of the crypto revolution and by being vocal about it, you and I can make that happen.

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Indian Lawmakers Propose an Extreme 10-Year Prison Sentence for Crypto Acquisition

Indian lawmakers draft bill for complete ban of cryptocurrency

According to a report by BloombergQuint, Indian lawmakers have drafted a bill supporting a 10-year prison sentence and hefty fines for any kind of crypto dealings in India. This comes hand-in-hand with the proposal for introduction of India’s official digital currency, ‘Digital Rupee’.

As per the ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill’, if passed, a severe term of 10 years will be imposed on those individuals who “mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies, directly or indirectly”. This ‘offense’ will be hailed “cognizable and non-bailable” according to the draft bill.

The draft bill has been proposed by a panel headed by the Secretary of Economic Affairs, Subhash Chandra Garg and includes members from the central bank, Securities and Exchange Board of India, Central Board of Direct Taxes, etc.

The criteria for the determination of the punishment term will be based on:

  • Culpability of the accused
  • Actual and intended gain made, and loss caused
  • Repetitive nature of the offense
  • Harm caused to the system

The fines exacted by the individuals will be three times more than the profits made by them or thrice the loss incurred by the system. On the involvement of a corporate body, the CEO, manager, director, and all the other top executives will be taken into account.

According to the report:

“If the loss or gain can’t be reasonably determined, the maximum fine that can be imposed may be notified by the government.”

What will happen if the Bill is passed?

From the commencement of the Act, all hodlers will be expected to come clean by declaring and ditching all kind of cryptocurrencies within 90 days. The Bill aims at amending the Prevention of Money Laundering Act, 2002 to extend the Act to activities like mining, holding, generating, selling, transfer and disposal of cryptocurrency. The bill also puts forward the launch of the ‘Digital Rupee’ in consultation with the central board of the Reserve Bank of India.

The Indian crypto enthusiasts have never failed to voice their opinions. Start-ups such as Flintstones Technologies Pvt. Ltd. and Kali Digital Ecosystems Pvt. Ltd. have challenged the central bank’s ban from not permitting services to virtual currency users. The crypto community of India took to Twitter, to show assertiveness on their stance through the campaign of #IndiaWantsCrypto.

Indian community stands against crypto ban

However, in response to the RTI  filed by a crypto lawyer, the RBI made a safe play by denying any kind of involvement in the crypto-ban bill as reported on Bitcoin News. The community is seeking clarity on the final ruling of a formal ban amidst all the confusion.

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WeChat Bans Crypto Trading on its App

WeChat Bans Crypto Trading on its App

In a recent development involving the Chinese messaging app giant WeChat updating its payment policy, and restricting the use of cryptocurrency services on its platform, slight tension may have been created in the Chinese Bitcoin market.

The development was brought to the notice of the larger cryptocurrency community in a Tweet made by Dovey Wan, a founding partner at cryptoasset fund Primitive, noting how the policy change may impact local liquidity as most of the over-the-counter (OTC) transactions occur on the social app.

Urgh, Wechat just updated its payment policy .. merchant can’t serve any token issuance/fund raising or crypto trading activities, otherwise account will be terminated

Given most OTC transactions are happening in wechat, this may impact local liquidity to quite some extent pic.twitter.com/TdNIO6cggS

— Dovey Wan 🗝🦖 (@DoveyWan) May 7, 2019

While the action of WeChat seems stifling to crypto adoption and usage, Binance CEO Changpeng Zhao (CZ) suggests they may have been pressured to do so. “But more and more restrictions are forced upon them (probably not their own choice),” he said. CZ further amplified his optimistic view on the matter in an accompanying tweet:

No need to worry. Some negative news often turn out to be positive in the long term. Chinese have a proverb for this. New (often better) opportunities always emerge during times of change.

— CZ Binance (@cz_binance) March 23, 2018

Although the news may not have directly impacted the global market in any noticeable way, as the price of Bitcoin has been somewhat resistant to negative media influence or the unfortunate series of events that have plagued the sector in recent times.

Last year, WeChat made a similar move when the central bank of China – the People’s Bank of China (PBOC) – began its clampdown on cryptocurrency trading and initial coin offerings. At the time, WeChat followed up the warnings with the suspension of cryptocurrency related accounts on its platform which affected many merchants and businesses subscribed to the platform. Although Leonhard Weese, the president of the Bitcoin Association of Hong Kong told Cointelegraph that many of the alleged suspended accounts were “blocked for talking about the vaccination scandal, not because of crypto.” However, this recent development has further proven the stance of WeChat towards cryptocurrencies.

In another news, Facebook seems to be doing a lot more than just developing a cryptocurrency, it is pulling resources to make way for the industry, perhaps carving an adoption path for its cryptocurrency when it’s developed. It is hiring experts from numerous fields and adjusting its policies to conform to a more crypto friendly stance.

 

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Indian Prime Minister Gives “Life Changing” DLT Full Backing

India’s Prime Minister Narendra Modi has spoken out in favor of giving support to distributed ledger technology (DLT), outlining its potential to change lives.

Modi sees emerging technologies such as blockchain boosting the Indian economy and creating a more buoyant employment landscape which could change the lives of “the last person waiting in the queue”.

These are encouraging words for an industry which is seen to be struggling this year, not helped by a controversial crypto ban which is under enforcement, and a sluggish performance to date by the government in passing helpful blockchain legislation.

Research conducted by Incrypt earlier this year found that 80% of developers could be forced to move abroad due to the distinct lack of regulatory frameworks in India. According to hiring solutions provider Belong Technologies, only 5,000 (0.25%) of the 2 million blockchain developers in India have the right blockchain skills.

The survey indicated that “the delay in putting together a framework for blockchain is causing India to lose out on jobs, drag in capital infusion, lack of innovation for local problems, talent flight, and setback in global positioning”.

These new comments could mark a positive change for the development and legislation of blockchain technology and help in retaining the skill needed to push into mainstream adoption across the sectors. A recent move in Hyderabad to create a blockchain district show some state governments’ willingness to take the next step. The Hyderabad project would see multinational IT services provider Tech Mahindra join forces with Telangana state government for the construction of the hub in the state capital.

Although the prime minister has waxed lyrical regarding blockchain on more than one occasion, the government will need to lead from the front and implement such plans as those in Telangana to show that it is serious.

The potential for blockchain in the Indian farming sector is huge as the second biggest global producer of wheat, rice, cotton, sugarcane, silk, groundnuts and dozens more produce. It is also the second biggest harvester of vegetables and fruit, representing 8.6% and 10.9% of overall production, respectively. Agricultural supply chains, often victims of mismanagements and corruption in India, will benefit enormously from a DLT adaptation, a fact not lost on Modi in a speech made earlier this year:

“The responsibility of helping our farmers rests on the shoulders of the new generation. Agricultural students will add value addition to the farmers in our country. There is one important technology in agriculture-artificial intelligence. In the coming days, blockchain technology will also play a huge role.”

 

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Zimbabwe Bans Cryptocurrency Trading

Zimbabwe has issued instructions to all financial institutions in the country to move away from any partnerships, relationships, or associations with all cryptocurrencies, according to a local news source.

The Reserve Bank of Zimbabwe registrar Norman Mataruka said these precautions were issued to protect the general public, as well as concerns for the country’s financial infrastructure. The institutions have 60 days to cut off ties and liquidate account balances.

“As monetary authorities, the Reserve Bank of Zimbabwe is the custodian of public trust and has an obligation to safeguard the integrity of payment systems,” said Mataruka.

This was further specified into any enterprises that maintained accounts, registered, traded, cleared, had collateral agreements, sent remittances, had payment and settle accounts, and gave loans against virtual tokens.

While the statements don’t affect personnel that wish to handle cryptocurrency, central bank governor John Mangudya in a separate statement advises against it:

“Any person who buys, sells, or otherwise transacts in cryptocurrencies, whether online, or otherwise, does so at their own risk and will have no recourse to the Reserve Bank or to any regulatory authority in the country,” he said.

Mangudya continued, talking about companies like Styx24, and Bitfinance, popular cryptocurrency exchanges in Zimbabwe:

“The Reserve Bank of Zimbabwe has not authorised or licensed any person or entity or exchange for the issuance, sale, purchase, exchange or investment in any virtual currencies/coins/tokens in Zimbabwe. Exchanges such as Bitfinance (Private) Limited (Golix) and Styx24 are not licensed or regulated by the Reserve Bank.”

Bitcoin gained popularity in the country last year, due to increasing inflation coupled with frustrating capital controls that prevented people from using money domestically, and restricted remittances outside of their borders.

Last year, Zimbabwe experienced a military takeover at the highest level, further shaking people’s trust in the government. The combination of hyperinflation, political instability, and restricted liquidity, were key factors in driving demand to Bitcoin and other cryptocurrencies.

With Zimbabwe trading Bitcoin at a premium compared to the rest of the world, it will be interesting to see how these events layout in the market.

 

 

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