Not too long ago, the world saw another cyberattack on a crypto marketplace, the third thus far in a calendar year. However, this hasn't stopped Paytm, one of India's top digital payment solutions provide and eMarketplace, to commit itself to allowing Bitcoin offerings in case India legalizes cryptocurrency.
In a recent conversation with a media house, Paytm's chief financial officer Madhur Deora said the company would not be averse to launching crypto offerings in India if the country's federal government decides how it wants to treat this regulatory grey.
Hackers have stolen about $130 million worth of cryptocurrency assets from Cream Finance to siphon away all Ethereum-based tokens on the platform, making it the third such hack on the company this year. The decentralized finance (DeFi) platform allows users to loan and speculate on cryptocurrency price variations.
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The government's position
The Reserve Bank of India, which regulates the country's money supply, had banned cryptocurrency in 2018. However, with the Supreme Court lifting the ban last year, it went about trying to create ways to structure the crypto-space, even suggesting that income from cryptocurrency trading be taxed.
In addition, the central bank was said to be working on launch India's official digital currency by the end of the 2021, a proposal about which there has been a studied silence over the past few weeks when crypto-trading has scaled new heights in India, with rough estimates suggesting that over $80 billion is invested in the segment.
There have been some rumours that the federal government could bring forth a new legislation in the Parliament some time in the first quarter of 2022. A draft shared earlier this year had sought to ban cryptocurrencies and pave the way for RBI to launch its own digital currency.
However, with the number of crypto investors showing signs of robust growth, the government may be forced to rethink the draft legislation. Incidentally, even those players operating in the Indian market want government regulation to be in place in order to safeguard investor interests.
Industry wants regulation
A group of cryptocurrency exchanges recently brought out an advertisement in one of India's top financial dailies asking government to provide regulatory guidance to the crypto industry. Currently, these exchanges operate on a self-regulatory code of compliance framed by the Internet and Mobile Association of India (IAMAI), an apex body mandated to expand and enhance digital and mobile value added services.
The regulatory code comprises an online know-your-customer certification, checks for fraud, investor education, audit trail of all transactions via blockchain, grievance redress mechanism and automatic compliance with the federal government's taxation laws.
In fact, the group members have called upon the federal government to take quick action to regulate the market, given that the Financial Action Task Force (FATF), a global body that tracks money laundering activities, has identified cryptocurrency as a security risk to countries.
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