Tag: crypto

OKX Exits India’s Crypto Space Failing to Meet Legal Requirements

India has tightened its noose around crypto-related businesses, mandating sector firms to comply with certain legal requirements. Failing to comply with these rules, crypto exchange OKX has decided to exit India’s crypto sphere. The Seychelles-headquartered exchange informed its Indian community on March 21 that they should close their accounts on the platform before April 30. OKX entered the Indian market between August and November last year. The company has been in business since 2017 and was founded by Star Xu.

The OKX team has issued a notice to Indian community saying that the exchange is no longer providing services in India.

“Due to local regulations, you need to close all margin positions, as well as positions in perpetuals, features, and options. Redeem all funds from Grow products,” the exchange said in its notice.

Starting April 30, accounts held by India-based people on OKX will be restricted. While they will still be allowed to withdraw funds, all other functions will be rendered defunct.

“Your funds will remain safe and available in your account until you withdraw them,” the exchange noted.

As of now it remains unclear if OKX’s exit from India’s crypto space is temporary until the company comes in compliance with the rules or if it’s making a long-term exit. India’s financial authorities, in order to make the crypto sector secure for people to engage with, is adding layers of regulations for sector players to comply with.

In December 2023, the Financial Intelligence Unit India (FIU) issued show cause notices to nine offshore companies asking them to show evidence that they were following all of India’s rules. These companies are — Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.

The FIU and the finance ministry of India are trying to ensure that all crypto-related firms are following the Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023. Soon after the announcement, the Binance and Kraken apps disappeared from Apple’s App Store and Google’s Play Store in India.

In the times to come, India is expected to deploy more layers of rules over the crypto sector following the regulatory roadmap finalised by the G20 group last year.

 

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‘Cannot Be Currencies’: FM Nirmala Sitharaman Spells India’s Stance on Crypto

The Web3 sector in India is currently under regulatory maintenance, with the government gradually deploying rules to safeguard the finances involved with the digital assets industry. Finance Minister Nirmala Sitharaman was asked Friday about India’s stance on cryptocurrencies. Sharing her response, the minister said that cryptocurrencies were not seen or perceived as ‘currency’ in India.

Sitharaman was speaking at the India Today Conclave 2024 on Friday when she was asked if the recent bull run in the crypto sector had nudged to government to think about the position of cryptocurrencies in India’s financial space.

In response to the question, Sitharaman reportedly said, “Its (the government’s) position has always been this, that assets created in the name of crypto can be assets for trading, assets for money making and assets for many other things. We haven’t regulated them then, and we haven’t regulated them now. But they cannot be currencies and that’s the Government of India’s position.”

Sitharaman’s statement comes when the crypto sector is on an upward trajectory. Owing to a massive inflow of capital into BTC through US-approved ETFs, Bitcoin price surged to an all-time high of over $73,700 (roughly Rs. 61 lakh) this week. Most popular cryptocurrencies tailed behind BTC on the surge trail, taking the crypto market capitalisation to over $2.7 trillion (roughly Rs. 2,23,78,585 crore).

With features like instant settlements of hefty payments, cheap cross-border money transfers, anonymous transactions, and capability to support tokenisation, the crypto sector offers several reasons for investors to consider them as an alternative to traditional markets.

In fact, earlier this week, the chief of the Securities and Exchange Board of India (SEBI) cited some of these crypto features while addressing concerns around a potential investor exodus from the traditional markets space towards options like crypto.

The Indian finance minister, however, maintained an unfazed approach towards the developments currently shaping the crypto industry. She also explained the government’s reason of drafting a crypto roadmap for the G20 nations under its presidency last year.

“Currencies are to be issued with a fiat of the government or the central bank of the day. And it is still unregulated in India. If one country regulates it and others don’t, it will be an easy way of moving money, round-tripping, funding drugs or even terrorism. That is why we thought it fit to raise it in the G20 forum, because as it is so technology-driven, it will have a bearing on cross-border payments,” Sitharaman reportedly added.

Supported by blockchain technologies, cryptocurrencies like Bitcoin and Ether are digital assets that carry financial values. For now, trading and holding cryptocurrencies is not illegal in India. Companies operating in the crypto sector must comply with anti-money laundering laws and KYC mandates to ensure crypto funds are not misused for unlawful activities.

To maintain some track of these largely anonymous crypto transactions, the current taxation policy in the country mandates one percent TDS on each crypto transaction. A tax of 30 percent is also levied on crypto profits in the country.

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Binance Extends Early Women’s Day Wishes, Launches Perfume Fragrance Named ‘Crypto’

Every year since 1975, March 8 is observed as International Women’s Day as per the UN’s declaration. Binance, touted as the world’s largest exchange, decided to appeal to potential women investors, entrepreneurs, and developers through a new kind of product – a perfume. Binance has announced the launch of a fragrance named ‘Crypto’, curated especially for women and packed in what appears to be an illustrious gold bottle. The tagline of this perfume is, ‘Fragrance meets Finance’.

The exchange is launching this Crypto perfume as a part of a new campaign. Addressing the gender imbalance that presently prevails in the crypto sector, Binance has decided to reward the first 5,000 women who complete a beginner crypto course on Binance Academy with $25 (roughly Rs. 2,070) in the form of Tether token vouchers.

This perfume is not for sale but is available for sampling at pop-up stands in Bahrain. The exchange has set up stalls for these perfumes in some public places to initiate conversations to discuss ways to fill the gender gap in the crypto sector.

“Bold, distinctive, and deliberately disruptive, ‘Crypto’ isn’t a scent we’re marketing – it’s a message to women that they have a significant role to play in the crypto revolution,“ a report by The Drum quoted Binance chief marketing officer Rachel Conlan as saying.

Binance posted a minute-long video on X, showing how the campaign shaped up in public places.

Binance posted a teaser about this perfume though its X handle, showing how the ‘Eau De Binance’ looked. On what looked like a fun footnote, Binance said this perfume is a ‘luxurious fusion’ of ‘exotic ingredients’ including HODL, DYOR, YOLO, and LFG – all of which are frequently used acronyms in the crypto sector.

As far the original fragrance of the Crypto perfume is concerned, a TechCrunch report said, “This fragrance opens with refreshing notes of ozone, salt, and moss, evoking the essence of a crisp and invigorating breeze. The heart notes reveal a luxurious blend of Oud, Mandarin, and precious woods, while the base notes of Amber, Woody, and Musk provide a warm, musky-sweet, and earthy aroma, exuding sophistication.”

On the business front, Binance has been undergoing several internal changes. The exchange’s new CEO, Richard Teng joined the company in November 2023 after its founder and former CEO Changpeng Zhao pleaded guilty in the US for violating money laundering laws. This week, Nigeria’s House of Representatives Committee on Financial Crimes has reportedly summoned Teng on suspicions of the exchange’s potential involvement in money laundering and terror financing.

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India’s Diverse Bazaars to Democratise with Metaverse, Says BWA Chief; Hails Reliance and Nykaa

The metaverse technology seems to have a bright future in India, use cases of which are being foreseen in plenty by experts from the industry. In a recent conversation with Gadgets360, Dilip Chenoy, the chairperson of Bharat Web3 Association highlighted a special industrial use case of the metaverse. Chenoy said, the hyper-realistic visuals that metaverse supports – will democratise the diverse bazaar ecosystem of the country and give it a powerful nudge on a global level.

“AI-powered vendors will engage in negotiations digitally. Augmented Reality (AR) will allow you to virtually try on makeup, clothes, and accessories before making a purchase. This is not a distant reality; it’s the transformative potential the metaverse holds for Indian retail. In India, brands such as Reliance and Nykaa are at the forefront, experimenting with AR/ VR technologies to create virtual showrooms,” Chenoy told Gadgets360.

The upcoming time has been termed as an ‘era of transformation’ for India’s retail sector. As far as the growth projection for the sector is concerned, India’s value retail market, excluding food and grocery, will likely surge to $170 billion (roughly Rs. 14,09,495 crore) by 2026, reports citing findings by Wazir Advisors had claimed in January. In 2023, the valuation of India’s value retail sector stood at $111 billion (roughly Rs. 9,20,317 crore).

Chenoy has expressed confidence that ample availability of metaverse technology will contribute heavily to the growth of Indian bazaars and authentic crafts in nearing times.

“Geographical barriers crumble, providing small businesses in India with the opportunity to reach global audiences. As India enthusiastically embraces this digital revolution, the future of shopping promises to be both exhilarating and transformative,” the chief of BWA added.

India stands out globally with one of the largest Web3 developer workforces, several players from the industry including Coinbase CEO Brian Armstrong have applauded in recent years. Earlier this year, Mark Zukerberg’s Meta also reached out to the telecom regulator of India seeking to ramp up dialogues and discussions around the ethical use-cases and development of technologies like AI and the metaverse.

Under the circumstances, Chenoy says, all India needs is a regulatory clarification that finalises the dos and don’ts for members and stakeholders of the Web3 industry.

“The Reserve Bank of India (RBI) has taken a proactive stance by actively encouraging blockchain adoption in payment systems and guiding banks through its regulatory sandbox initiative. Despite the growing interest, regulatory uncertainty poses a hurdle for startups venturing into the space. Clear regulations and policies are imperative to instil confidence in companies exploring this transformative technology,” Chenoy noted.

The BWA came into existence in November 2022. It comprises of representatives from India’s crypto and Web3 space who collectively collaborate with the government to foster the growth of the sector in India.

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UK Government Plans to Bring New Rules for Stablecoins, Crypto Staking in Next Six Months

The UK government plans to get new rules governing stablecoins and staking services for cryptoassets approved by lawmakers within the next six months as pressure ratchets up to deliver on specific proposals ahead of an impending general election.

Economic Secretary to the Treasury Bim Afolami, speaking at an industry event hosted by Coinbase in London on Monday, said the government was “pushing very hard” on making legislation happen.

“We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable,” Afolami said.

The Treasury first pledged in October to provide more clarity on specific areas of crypto by some point in 2024. That commitment followed an earlier consultation on fiat-backed stablecoins — digital tokens that use reserves of assets to maintain a one-to-one value with a traditional currency like the dollar or pound — and the passing of the larger Financial Services and Markets Act last summer.

Market observers like blockchain analytics firm Elliptic have said they expect to see fiat-backed stablecoins and their issuers regulated under existing payments laws, a move that would provide the UK’s financial regulator with the means to dictate which types of assets can support a stablecoin.

Staking, a process whereby investors lock up their tokens to help keep a blockchain operating in return for a small yield, is expected to receive a new classification that avoids being considered a collective investment, Tom Duff Gordon, vice president for international policy at Coinbase, said in an interview.

Broader proposals that would bring crypto exchanges and other industry providers under existing financial services rules remain in limbo. When asked if that guidance might also become legislation this year, Afolami said he was unable to provide a timeline.

Prime Minister Rishi Sunak first pledged to make the UK a global crypto hub in 2022, seeking to attract more digital-asset businesses and investment to the country. Relatively little regulatory progress has been made since then, even as crypto firms say a lack of clear rules has made it hard for them to operate.

“Short answer is, I don’t know,” Afolami said of a timeline on broader crypto regulation beyond stablecoins and staking. “There’s just a huge amount going on, so I don’t want to commit to that now.”

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Coinbase Crypto Exchange, US SEC Lock Horns in US Court Over Digital Assets as Securities

A federal judge in Manhattan on Wednesday grilled Coinbase and the US securities regulator about their divergent views on whether and when digital assets are securities, in a case closely watched by the cryptocurrency industry.

Coinbase has asked the court to dismiss the Securities and Exchange Commission’s lawsuit alleging the largest US crypto exchange is flouting its rules.

Judge Katherine Polk Failla on Wednesday heard arguments from both sides, focusing her questions on the legal precedent defining securities, and the attributes of several crypto tokens traded on Coinbase and elsewhere that the regulator has deemed investment contracts.

Failla did not decide the matter from the bench, noting she was still weighing some questions after the more than four-hour hearing.

The judge’s ruling is likely to have implications for digital assets by helping to clarify the SEC’s jurisdiction over the sector.

The case is one of a slew the SEC has brought against the crypto sector. The agency focused initially on companies selling digital tokens, but under the leadership of chair Gary Gensler has targeted firms offering trading platforms and clearing activity, and acting as broker-dealers.

The SEC sued Coinbase in June, saying the firm facilitated trading of at least 13 crypto tokens, including Solana, Cardano and Polygon, which it said should have been registered as securities.

The Securities Act of 1933 outlined a definition of the term “security,” yet many experts rely on a US Supreme Court case to determine if an investment product constitutes a security. A key test is whether people are contracting to invest in a common enterprise with the expectation of profit.

Coinbase, the world’s largest publicly traded cryptocurrency exchange, has argued that crypto assets, unlike stocks and bonds, do not meet that definition of an investment contract, a position held by the vast majority of the crypto industry.

Lawyers for the SEC argued that securities differ from purchases of collectibles like baseball cards or even Beanie Babies, referencing a 1990s trend in which Americans bought the dolls with the expectations they would rise in value.

Patrick Costello, SEC assistant chief litigation counsel, argued that the crypto tokens at the heart of the case support a larger “enterprise,” making them akin to an investment contract.

“When the value of the network or the ecosystem increases, so does the value of the (associated) token,” he said.

Still, Failla told SEC attorneys she was “concerned” that the agency was asking her to “broaden the definition of what constitutes a security.”

The SEC said buyers of digital assets, even on secondary markets such as Coinbase’s platform, were purchasing the tokens as investments akin to stock shares or bonds.

But Coinbase’s lawyers disagreed, noting that buyers of such tokens were not signing contracts entitling them to proceeds of a common enterprise.

“I’ll tell you this: I think there would have been a lot of surprise to find that an investment contract didn’t have anything to do with a contract,” said William Savitt, a lawyer for Coinbase.

The judge appeared dismissive of Coinbase’s argument that the lawsuit implicates the so-called major questions doctrine. That legal principle is based on a Supreme Court ruling that says federal agencies cannot regulate without specific congressional authorization.

The SEC in its lawsuit also targeted Coinbase’s “staking” program, in which it pools assets to verify activity on blockchain networks and takes commissions, in exchange for “rewards” to customers. The SEC said that program should have been registered with the agency.

© Thomson Reuters 2024

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Crypto Purchase Via Credit Card Could be Banned in South Korea, Here’s Why

South Korea, despite its relatively pro-crypto stance, is trying to regulate the ways its residents interact and engage with virtual currencies. The Financial Services Commission (FSC) of South Korea is proposing to ban the purchase of cryptocurrencies via credit cards. The aim is to keep reducing the margin for notorious elements to misuse crypto assets for illegal activities like money laundering and terror financing. Since transactions via crypto are highly private and largely untraceable, these virtual currencies are prone to easily being exploited by criminals – which is a matter of concern for several nations including South Korea.

“Concerns have been raised about illegal outflow of domestic funds overseas due to card payments on overseas virtual asset exchanges, money laundering, speculation, and encouragement of speculative activities,” the FSC said in an official post.

As per South Korea’s current laws, all local crypto exchanges in the country are mandated to collect and save the identities of their users for verification purposes. As of now these rules have not been mandated for international crypto exchanges, through which, miscreants could facilitate unlawful activities, misusing crypto and defrauding banks that provided them with credit cards.

“In the future, it is expected that a basis for cooperation with international brands will be established and prevention of foreign currency outflow and money laundering will be strengthened,” the FSC added.

For now, the regulator has opened the topic for public feedback up until February 13. After review of this feedback, a concrete decision on the subject is likely to be finalised in the first half of 2024. A study by the FSC had stated that the crypto market in South Korea had touched the valuation of $46 billion (roughly Rs. 3,66,318 crore) by the end of 2021, with the number of users reaching nearly 5.58 million or around 10 percent of the country’s population.

In February last year, South Korea announced that all blockchain-based tokens operational within its territories, will be treated under the ‘securities’ category of assets. Investment instruments that do not require any additional fee such as maintenance charges, expect for the original investment are treated as ‘securities’ in South Korea.

The nation’s Ministry of Justice is also reportedly constructing the ‘Virtual Currency Tracking System’ to prevent cases of money laundering via crypto.

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US prosecutors opt out of second trial for crypto tycoon Sam Bankman-Fried | Crypto News

Prosecutors cite ‘strong public interest’ for resolving major case against disgraced crypto exchange founder.

United States prosecutors have chosen not to pursue a second trial for FTX cryptocurrency exchange founder Sam Bankman-Fried, who has already been found guilty of fraud and money laundering, and proceed instead to sentencing.

Prosecutors said in a letter filed in a New York court on Friday that pursuing a second trial for the disgraced tycoon would only serve to delay the case against him, which is already strong enough.

“Given that practical reality, and the strong public interest in a prompt resolution of this matter, the Government intends to proceed to sentencing on the counts for which the defendant was convicted at trial,” prosecutors said in the letter to Judge Lewis Kaplan, who presided over Bankman-Fried’s first criminal trial last year.

In November, a jury found Bankman-Fried guilty of seven counts of fraud, embezzlement and criminal conspiracy, among other charges.

The 31-year-old was accused of using billions of dollars from customer deposits on FTX to cover losses at his hedge fund, pay off loans and buy luxury real estate, among other large personal expenses.

At the trial, he had admitted to making “mistakes” that ended up hurting people, but pleaded not guilty to the charges as he claimed he never meant to steal.

Billions of dollars were lost after Bankman-Fried’s crimes came to light in 2022, something that also contributed to deepening a crypto market downturn that had started earlier that year.

Federal prosecutors have previously described the case as “one of the biggest financial frauds in American history”.

Bankman-Fried is slated to be sentenced on March 28, when he could face up to 110 years in prison.

Prosecutors argued that much of the evidence that could be offered at a second trial was already presented at the first trial, and that a second trial would not affect how much time he could face in prison.

They also said victims would not benefit from forfeiture or restitution orders if sentencing is delayed.

Bankman-Fried is expected to file an appeal against his conviction.

He was previously extradited from the Bahamas, where his companies were based.

The US and the Bahamas have since been clashing over which country’s prosecutors have the legal jurisdiction and right to prosecute him. US prosecutors on Friday wrote that the US government “does not have a timeline for when the Bahamas may respond to its request”.

Bankman-Fried, a graduate of the Massachusetts Institute of Technology (MIT), has been in jail since August, and had his bail revoked after a judge concluded that he had likely tampered with prospective trial witnesses.

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Crypto Expands Financial Choices, Gives Independence Making it Attractive for Investors: Binance

The outlook of the investor community towards cryptocurrencies is, needless to say, an ever-evolving landscape. Several governments from around the world are working to regulate the crypto sector, given that the industry has amassed a large community worldwide in recent years despite its volatile nature. There are two big reasons driving the crypto craze internationally at this point, as per a recently conducted survey by Binance. The survey found that cryptocurrencies offer an alternative to traditional banking services and help bring financial independence for its holders with its decentralised element.

As part of its latest campaign titled ‘Crypto is Better with Binance’, the US-based crypto exchange surveyed 1,172 participants from Asia and Pacific, the Middle East, Europe, Africa, and Latin America, a report by CryptoPotato said citing Binance’s report.

Out of the totally surveyed group, 76 percent said they view crypto as a tool to reduce issues like income inequality and financial imbalance. About 45 percent respondents were attracted to crypto’s capability to fetch quick capital while 36 percent respondents praised crypto for being an alternative to centralised banking that is overseen by the government.

In the coming years, 23 percent of the surveyed participants reportedly said they would use crypto assets to generate their main source of income. Another 23 percent claimed they would use crypto investments as a means to save for home purchases, as per the report. Around 12 percent survey participants also stated they would utilise crypto assets for processing international transactions and remittances.

As per Statista, there are over 420 million cryptocurrency users around the world. In 2016, only five million investors were part of the crypto circle. In addition, data by CoinMarketCap suggests that currently there are over two million cryptocurrencies in circulation across 684 exchanges. These stats serve as evidence that the crypto industry is indeed growing around the world.

Meanwhile, about 45 percent of millennials and 46 percent of the Gen Z population are already approaching cryptocurrencies as a retirement plan in the US. The finding was published as part of a survey from the US asset manager Charles Schwab in October last year.

For now, India is the largest crypto market in the Central & Southern Asia and Oceania (CSAO) region, leading the world in grassroots adoption of this up-and-coming financial sector. A recent Chainalysis report, published in September 2023 said India ranked first out of 154 nations.

The report also said that Indonesia, Pakistan, Brazil, China, Turkey, Russia, UK, Argentina, Mexico, Bangladesh, Japan, Canada, and Morocco are other nations where crypto adoption is becoming a regular financial activity.

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CoinSwitch Lifts Curtains off New Umbrella Brand ‘PeepalCo’, Plans to Expand Wealth Tech

CoinSwitch, one of India’s popular crypto trading platforms, announced its new umbrella brand on Tuesday, December 12. Called PeepalCo, the new brand will envelope three platforms owned by the same company. Out of these three internal units, one is CoinSwitch’s crypto retail app and advanced trading platform called CoinSwitch Pro. The market entries of the other two units — a soon-to-be-launched platform with newer investment classes and a wealth-management division catering to High-Net-Worth Individuals — are around the corner as for now.

“The new structure is designed to unlock the full potential of our organisation and align our resources more effectively. We will focus on capital allocation and PeepalCo will guide us in the journey forward, to democratise wealth-creation for India,” Ashish Singhal, Co-Founder and Group CEO, PeepalCo group said in an official statement.

Balaji Srihari has been chosen as the Business Head to lead PeepalCo’s CoinSwitch division. Srihari has previously managed CoinSwitch apps. In the coming months, PeepalCo would be unveiling its upcoming initiatives that largely aims at expanding its offerings.

The company’s plans to do so do not come as a surprise given that the Web3 sector in India is still largely unregulated. As per recent updates shared by government officials, concrete laws to govern the crypto sector could still be up to 18 months away.

Due to a drop in user engagements, CoinSwitch had recently trimmed its customer support team. To ramp up engagements with its platform, CoinSwitch launched a new feature called ‘Earn’. Through this, the platform will let users ‘lock-in’ their crypto assets and earn rewards in the form of cryptocurrencies and monetise their holdings without having to sell their assets.

In the months to come, PeepalCo will expediate the process of bringing in services like fixed deposits, bonds, exchange-traded funds (ETFs), stocks, and mutual funds — all of which are classified as highly-regulated investment products — to keep its business on the roll despite a growth lag in the core crypto segments.

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