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India’s Rumored Crypto Ban May Be Overblown, Say Industry Pros

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Rumors that India might be considering a new ban on crypto may be premature, exchange founders and startup CEOs working in the sector believe.

Indian news site The Economic Times created a stir Friday by suggesting that lawmakers in India, where the Supreme Court only overturned a punitive banking ban from the Reserve Bank of India (RBI) four months ago, were planning on slapping a new ban on crypto companies.

The story, titled “With a law, India plans lasting ban on crypto,” cited one unnamed “senior government official” who told The Economic Times that, “A note [presumably on crypto] has been moved (by the finance ministry) for inter-ministerial consultations.”

The article doesn’t provide any information on what the note could be but says that it was spurred on by the Supreme Court ruling, which allowed crypto exchanges to finally access banking services after nearly two years stuck in the wilderness.

They then claim that it could well lean on a previous government draft law, from July 2019, which proposed that all forms of cryptocurrency be banned, with anyone caught holding them facing up a fine and up to 10 years imprisonment.

But is there any substance to this?

Well, the report in question relates to one published by a government panel, chaired by former Economic Affairs Secretary Subhash Chandra Garg. While the report recognizes blockchain technology is an “important new and innovative technology,” it notes, “with serious concern,” that the use of cryptocurrencies in India is “mushrooming” at an alarming rate.

Highlighting that many crypto assets don’t have any intrinsic value and supporting the RBI ban, the report concludes: “the Committee has recommended a law banning the cryptocurrencies in India and criminalising carrying on of any activities connected with cryptocurrencies in India.”

The only exception, they say, would be a digital currency issued by the state itself.

See also: India’s Central Bank Plans to Fight Supreme Court Crypto Ruling

Speaking to CoinDesk, Nischal Shetty, the founder and CEO of WazirX, a local exchange acquired by Binance late last year, said a blanket ban on crypto wasn’t what he was seeing.

“This is all leaked information,” Shetty said. “There is movement for sure, but no one has been able to get clarity on whether it specifically talks about a ban, or whether it talks about just moving forward with regulation. There are a lot of assumptions.”

Based on his own government sources, Shetty said he believes that the Finance Ministry is consulting with other government departments to determine what the next regulatory step should be.

“I’ve personally met people in government, right, ministers in Parliament, and what I’ve seen is they’ve been very positive about regulating,” Shetty said. “Some of them have been very vocal that a ban is not the solution because they understand technology … they understand that banning a technology is not a solution.”

The original draft bill from the Garg committee – which has long since been wound up – is still floating in the Finance Ministry and Shetty agrees it could form part of the “default content” when determining how to move forward with crypto regulation.

“Someone from the Finance Ministry has proposed that they should consider looking into cryptocurrencies and figuring out what to do, either to ban it, or to regulate it,” Shetty said, as the lifting of the RBI ban has made this a priority for officials. “[The government] wants to see progress and regulations,” he added.

But, he points out, the idea of reaching out to other departments is in order to take in other viewpoints. Citing Bloomberg Quint’s appraisal of the note, Shetty highlighted: “if in any way, they [the Finance Ministry] get pushback that a ban is not the right way approach, then they would set up another committee, which would explore [crypto] regulation.”

“I see this as a positive step,” he continued, “there is no clarity in India today. It’s a good thing that someone is taking the initiative.”

See also: Indian Crypto Exchange Adds Bank Transfers Hours After RBI Ban Lifted

Shetty’s thoughts have been echoed elsewhere.

A spokesperson for the Bangalore-based exchange CoinSwitch said, “the report has no mention of the particular government body responsible for such actions or contains quotes from reliable sources. As such there is a lack of clarity and until further details reveal we would carefully monitor the situation.”

Similarly, Sumit Gupta, the co-founder and CEO of CoinDCX, one of the country’s largest exchanges, told CoinDesk in an email that, “reconsidering past bills is likely part of the process of forming clearer regulations around the use of cryptocurrencies within India.”

Gupta noted the lifting of the RBI ban has led to record trading volumes and user adoption, calling recent growth in the sector “unprecedented.”

CoinTelegraph reported earlier this week that there has been a flurry of new exchanges launching in India, as well as a wave of outside investment from global players, including OKEx and Binance.

“Given the previous open-mindedness of government officials and regulators in the Supreme Court case, where they were willing to engage with cryptocurrency sector leaders in dialogue about the future of the industry – we are confident that a similarly communicative approach will be taken in making this decision,” Gupta said .

See also: India’s Central Bank Removes Lingering Confusion Over Banking for Crypto Firms

Among some of the existing industry players in India’s crypto scene, a consensus is building around starting more formal dialogues with officials. There’s already an active crypto-related trade body within the Internet and Mobile Association of India, which helped challenge the RBI ban.

Shetty said WazirX was looking at creating a self-regulatory framework.

“We have to show our government on why we are already practicing KYC [know-your-customer verification] and all the standard practices in India as exchanges,” he said. “I think a formal regulatory note from us would be helpful in going in the right direction.”

CoinDesk reached out to the India’s Finance Ministry for comment, but did not receive a response by press time.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/india-lawmakers-figuring-crypto-regulation

Blockchain

Crypto Derivatives September’s Recap: Binance Futures Leading As BitMEX Down 30%

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This week, Belgium’s Financial Services and Markets Authority made a startling revelation. Cryptocurrency fraud victims have lost at least €10 million between May 2019 and September 2020, the financial regulator said.

Belgians Have Lost €10 Million In Cryptocurrency Fraud

Belgian citizens have lost almost 10 million euros to fraudulent crypto investment schemes. Belgium’s apex financial authority, the Financial Services and Markets Authority, said on Monday. According to the watchdog, this data is from May 2019 to September 2020. Speaking about the modus operandi adopted by the scammers and crypto robbers, the FSMA said:

These platforms often use very aggressive methods to try to persuade you to invest ever larger sums. They will also try to persuade you to let them take control of your computer remotely so as to be able to make certain payments.

Adding to its statement, the regulator pointed out ‘fake advertisements that typically use images of celebrities.’ Potential victims get beguiled by platforms displaying these adverts circulating on social media. When interested folks click on them, cryptocurrency shysters call them to ‘to discuss an investment offer.’

Apart from bitcoin and other cryptocurrencies, online robbers offer investment schemes in foreign exchange products and contracts for differences (CFDs) that can be traded in markets with commodities and shares.

The FSMA had already apprised users about potential cryptocurrency frauds and scam-filled activities in 2018. Since then, it has added fake credit letters to its list of unscrupulous investment offerings. These the regulator said claim ‘to offer loans on favorable terms but intend to steal money.’ Also, investors need to stay away from fraudulent wealth management and alternative investment scams, FSMA mentioned.

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Is This Why The UK FCA Banned Crypto Derivatives For Retail Customers?

As per the latest update from the cryptocurrency scene in the UK, the country’s top financial watchdog, the Financial Conduct Authority (FCA), has banned the sale, marketing, and distribution of cryptocurrency derivatives and ETNs to retail customers effective January 6th, 2021.

The FCA enumerated several reasons to justify it’s latest banning move. Volatility in crypto prices, the so-called ‘lack of inherent value,’ and inadequate understanding of cryptocurrency systems are others. But the financial regulator also specified that ‘prevalence of market abuse and financial crime in the secondary market’ is why retail players should stay away from crypto derivatives.

Also, there is no legitimate need for retail customers to invest in these products, the FCA added. The most crucial question now is: Will these measures actually block the propagation of crypto fraud and scams? Will such a ban actually protect users?

In a world where fiat and traditional market scams are dominant and much more widespread than digital currency fraud, an outright ban on different crypto investment opportunities will only do so much. What is required is tightening law enforcement on scammers and the bad actors, which will eventually make crypto investment safe for users.

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Source: https://coingenius.news/crypto-derivatives-septembers-recap-binance-futures-leading-as-bitmex-down-30-9/

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Pantera says they’re placing a heavier bet on DeFi than the rest of the market

Despite the recent slump, Pantera believes that most of the growth in the next bull cycle will be generated by DeFi.

The post Pantera says they’re placing a heavier bet on DeFi than the rest of the market first appeared on Blockchain Consultants.

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In an October 6 webinar, Pantera Capital disclosed that their Digital Asset Fund intends to invest more heavily into DeFi assets than the rest of the market. 

Source: Pantera Capital.

Pantera’s co-chief investment officer, Joey Krug said that unlike other funds that allocate most of their portfolios to stores of value like Bitcoin (BTC), his company is prepared to place its primary bet on DeFi:

“And so if you look at portfolio construction, we can see that relative to the market, we’re taking a different bet with the Digital Asset Fund. Most of the market is basically payments and store of value. So things like Bitcoin, Bitcoin Cash, etc. …> For the most part, we’re much more overweight, smart contract platforms, decentralized finance, open finance, whatever you want to call it is we think that’s where that sort of growth is going to be seen this bull market.”<!—->

Krug also noted the rapid pace of growth in the DeFi space — both in terms of the value locked and trading volume on decentralized exchanges. During the webinar, a Pantera Capital representative also confirmed that they believe DeFi is the future of finance and not just another bubble. 

Source: Pantera Capital.

Meanwhile, Pantera CEO Dan Morehead opined that the influx of fiat into the economy has pushed crypto prices higher and that Pantera expects an even stronger rally in the near future:

“We think the next two or three years [there’s] going to be a massive rally.”

Pantera says they’re placing a heavier bet on DeFi than the rest of the market

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Source: https://blockchainconsultants.io/pantera-says-theyre-placing-a-heavier-bet-on-defi-than-the-rest-of-the-market/?utm_source=rss&utm_medium=rss&utm_campaign=pantera-says-theyre-placing-a-heavier-bet-on-defi-than-the-rest-of-the-market

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Blockchain

FCA Bans Retail Crypto Derivatives Offerings Across the U.K.

There have been significant concerns in the United Kingdom over a possible ban on crypto-based derivatives for about a year. While it seemed like the government […]

The post FCA Bans Retail Crypto Derivatives Offerings Across the U.K. first appeared on Blockchain Consultants.

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There have been significant concerns in the United Kingdom over a possible ban on crypto-based derivatives for about a year. While it seemed like the government […]

Source: https://blockchainconsultants.io/fca-bans-retail-crypto-derivatives-offerings-across-the-u-k/?utm_source=rss&utm_medium=rss&utm_campaign=fca-bans-retail-crypto-derivatives-offerings-across-the-u-k

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