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Cryptokart: Another Indian Crypto Exchange Shuts Down Operations

Founder of Indian cryptocurrency exchange Cryptokart Gaurang Poddar announced that the company is shutting down.

Founder of Indian cryptocurrency exchange Cryptokart Gaurang Poddar announced that his company is shutting down in a LinkedIn post published last week.

In his post, Poddar described the shutdown of the exchange as “difficult, given the hard work we’ve put in” but concluded that overall the experience was positive and that he was proud of the platform and seemed intent on remaining in the field, asking “If you know anyone interested in launching their own exchange, please let me know.”

Poddar announced that he was looking for opportunities in product management, and asked anyone who knew about such opportunities to contact him. Poddar launched Cryptokart in 2017, roughly one year and nine months ago.

The news comes after Indian crypto exchange Koinex ceased operations in June and in May Coinome — another crypto exchange operating in the country — announced the halt of its services. Both exchanges cited the hostile regulatory environment as the cause of their shutdowns.

As Cointelegraph reported last month, Indian lawmakers have reportedly proposed to enforce a 10-year jail term for citizens who deal with cryptocurrencies. The new tough crypto regulation is part of a recently proposed draft bill called “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019.”

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Indian Minister: No Official Ban on Cryptocurrencies in India Yet

India’s Minister of State for Finance says there is no law that specifically bans cryptocurrency use in India.

India’s Minister of State for Finance Anurag Thakur has said that there is no law in India expressly prohibiting the use of cryptocurrencies. Local media outlet Inc42 reported Thakur’s statement on July 19, 

The statement came during a recent exchange between a Member of Parliament (MP) and Thakur inside of Rajya Sabha — the “Council of States” or upper house of Indian legislature.

MP Dharmapuri Srinivas reportedly asked Thakur about whether cryptocurrency was actually illegal. Srinivas apparently followed up his first question on legality with others on information and enforcement, asking:

“Whether the government has taken note about the prevalence of cryptocurrency in the country and if any action is being taken against the persons who are responsible for running the cryptocurrency in the market?”

Thakur reportedly replied in the negative. 

Elaborating on the country’s position, Thakur said that there is no law specific to crypto to refer to. Cryptocurrency activities are reportedly only actionable offenses if they violate preexisting laws, which can be enforced by entities including the RBI, enforcement directorate, and income tax authorities.

As previously reported by Cointelegraph, an unverified, leaked bill draft entitled “Banning of Cryptocurrency & Regulation of Official Digital Currencies” would ban all “non-official” cryptocurrencies. It defines cryptocurrencies as: 

“Any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”  

However, this definition leaves India the option of issuing a digital Rupee, which the bill also proposes.

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‘Pathetic and Corrupt’ — Tim Draper Slams Proposed Bitcoin Ban in India

The billionaire investor appeared to stand up for internet freedom in India, but his comments gained little appreciation.

Bitcoin (BTC) proponent and Tezos investor Tim Draper hit out at the Indian government on Twitter July 16 after alleged evidence appeared it was preparing to ban cryptocurrency

Draper Appears To Mistake Draft Law For Genuine Ban

In a strongly-worded message, Draper, who recently took Bitcoin advocacy to Argentina’s government, called Delhi “pathetic and corrupt.”

“People behaving badly! India’s government banned Bitcoin, a currency providing great hope for prosperity in a country that desperately needs it. Shame on India leadership,” he wrote. 

The comments attracted immediate pushback from Twitter users, many of them from India, who argued Draper was not in touch with developments and was acting on hearsay. 

The billionaire investor is well known for his support of freedom of Bitcoin use, having revealed a distaste for state involvement via overly strict regulation on multiple occasions. 

At press time, Draper had not responded to criticism of his initial tweet. 

No Date For Ban’s Ratification

As Cointelegraph reported, earlier, an Indian blockchain lawyer had uploaded what he described as possible evidence of a draft law banning cryptocurrency in India.

Under the alleged proposal, the government would issue an electronic version of the rupee, which together with its predecessor would be the only domestic currency available for use in the country. 

The document stresses the new rupee is not considered a cryptocurrency, while actual cryptocurrencies such as Bitcoin would be completely illegal.

Prison sentences of up to ten years would be handed to those who hold, transact in, mine or complete any form of operation using such cryptocurrencies.

Lawmakers are yet to sign the bill into law, and have not given public comment about how they would ensure compliance. 

Decentralized blockchains, especially Bitcoin’s, cannot be shut down by one specific party without amassing an inordinate amount of computing support. The idea of the United States banning Bitcoin meanwhile formed a topic of debate this week after disparaging comments from President Donald Trump.

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India: Leaked Draft Bill Would Ban All Crypto Except ‘Digital Rupee’

Draft legislation that would allegedly impose a ban using cryptocurrencies in India is being circulated by local blockchain legal experts on social media.

Draft legislation that would allegedly impose a ban on the use of cryptocurrencies in India is being circulated by local blockchain legal experts on social media.

An unverified document published to Scribd by tech lawyer Varun Sethi on July 15 appears to reveal a draft bill entitled “Banning of Cryptocurrency & Regulation of Official Digital Currencies.” Even if authentic, the bill will not allegedly be debated during the 2019 Monsoon session of the Indian parliament, according to one local crypto industry figure.

Running at 18 pages, the document proposes a definition of cryptocurrencies as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value […]” 

The definition then further notes such currencies’ use in exchange, as a store of account or value, and includes their use in financial transactions as well as investment schemes. 

The proposed bill suggests that a “Digital Rupee” — digitally issued by the country’s Reserve Bank — would be approved by the Central Government as legal tender, while all currencies satisfying the aforementioned cryptocurrency definition would be comprehensively prohibited.

The document reads: 

“No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.”

The proposed prohibition notably does not apply to anyone using distributed ledger technologies (DLT) or other related technologies for the purposes of experiments or research, including within educational contexts, provided that no cryptocurrencies are involved for transacting payments.

The prohibition would also not apply to the use of DLT for creating a network that delivers financial or other services, or for other means of value creation, provided that again that such activities do not involve the use of cryptocurrencies as payment.

The proposed penalty for violating the prohibition on cryptocurrencies — which expressly excludes the Digital Rupee — would be either a fine or up to ten years’ imprisonment, or both.

As recently reported, the Reserve Bank of India (RBI) is reported to be developing a blockchain platform for banking in its R&D branch. At the start of this year, it was reported that RBI had paused its plans to issue its own central bank digital currency.

Meanwhile, Facebook is alleged to have withheld from applying to RBI for approval for its forthcoming Libra token, in light of the country’s rumored consideration of a complete prohibition of cryptocurrencies and long history of crypto-adversarial actions. This June, RBI has denied it has any knowledge or involvement in the drafting of such a prohibition by the government.

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Indian Authorities Express Concerns Over Facebook’s Libra

Indian authorities expressed concerns over Facebook’s long-awaited stablecoin Libra.

India’s authorities have expressed concern over Facebook’s forthcoming stablecoin Libra, Bloomberg reported on July 8.

Subhash Garg, Economic Affairs Secretary at India’s Ministry of Finance, told Bloomberg that the “design of the Facebook currency has not been fully explained. But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”

Facebook’s Libra is set to be a stablecoin pegged to a reserve of assets which would purportedly preclude the coin from volatility. In late June, Dovey Wan of Primitive Ventures argued that Libra carries the risk of becoming a financial monopoly as well as regulatory risks. Per Wan, Facebook can easily leverage its enormous user base of over two billion people worldwide to quickly achieve economies of scale and the attendant network effect.

The social media giant had made clear that with Libra and its associated Calibra wallet it wanted to reach unbanked consumers and give them access to financial services. However, a ban on Libra in India could mean that the country, home to the second-largest unbanked population in the world and 260 million Facebook users, misses out when Libra launches in the first half of next year.

India is reportedly considering a complete ban of cryptocurrencies, with a proposal to reportedly enforce a 10-year prison term for citizens who deal with crypto.

As previously reported, Facebook has not applied for approval with the Reserve Bank of India (RBI) to operate its digital currency in the country, which makes it unavailable in India due to the current ban of blockchain-based currency transactions.

At the time, Anirudh Rastogi, founder at local tech-focused law firm Ikigai Law, suggested that the RBI would not be concerned about Facebook’s Libra if the project was operating in a closed peer-to-peer system.

India is currently the largest remittance-receiving country in the world, with top remittances amounting to $79 billion in 2018, according to the World Bank. In 2018, remittances in India reportedly grew by more than 14%, following a flooding disaster in Kerala which likely boosted the financial help that migrants sent to families.

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Indian Authorities Arrest 4 Individuals Accused of Crypto Ponzi Scheme

Indian authorities arrest four individuals believed to be behind the crypto KBC, which allegedly used a pyramid scheme to encourage investments, promising a 100x ROI.

The Criminal Investigation Department (CID) of India has arrested Vijay Prajapati, Dhiraj Patel, Kamruddin Syed, and Ashiq Shaikh, the alleged creators of the cryptocurrency KBC Coin, according to a report by The Times of India on July 4.

As per the report, the CID argues that KBC is a Ponzi Scheme

KBC reportedly launched 6 months ago, and its price has not moved since. KBC coins were reportedly issued at 10 paisas apiece, with the promise that they would skyrocket in value to 10 rupees in a short time ⁠— a 100-fold return on investment. 

According to a CID member, an individual named Baljeetsingh Lashkariya promoted KBC via a pyramid scheme, saying that the “first investor in the chain would get an incentive from the last circle of investors. This offer played a major role in bringing more investors to the company.” 

Lashkariya and another promoter, Mohan Patel, have reportedly “gone underground.”

As previously reported by Cointelegraph, Indian legislators have recently proposed a bill that would punish crypto enthusiasts in the country with up to 10 years in jail for violating the country’s anti-crypto laws.

This enforcement policy is apparently part of the proposed bill “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019,” said The Block.

Early drafts of this bill appeared at least as far back as April as a means to ban crypto activities in India.

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India: Notable Crypto Exchange Shutters Ops Amid Bitcoin Ban Rumors

Indian Crypto Exchange Bites The Dust

Despite seemingly massive support for Bitcoin, crypto assets, and blockchain in India, one of the nation’s largest exchanges recently shuttered its operations. According to a blog post published Thursday, penned by a co-founder of Koinex, Rahul Raj, the platform will be closing operations immediately.

Raj, explaining that rationale behind this dramatic decision, cites “months of [regulatory] uncertainty and disruption”. This is in reference to India’s odd stance on digital assets, which has forced regulated financial institutions, including banks, to stop interacting with crypto exchanges, startups, and individuals in this ecosystem. Without a proper banking partner, it is no surprise that Koinex has been struggling, as, after all, fiat-to-crypto (and vice-versa) trades are a key part of any exchange. Raj expands:

The last 14 months have been tough to operate a digital assets trading business in India, on account of the closure of bank accounts holding user deposits… We have consistently been facing denials in payment services from payment gateways, bank account closures and blocking of transactions for trading of digital assets. 

This is far from the worst though. Earlier this month, the Bitcoin and crypto asset community woke up to a harrowing tidbit of news from Bloomberg Quint. An article, which cited a “draft bill”, revealed that regulators in India, from multiple financial and judiciary agencies, revealed that those who involve themselves in the “sale, purchase and issuance of all types” of crypto assets, including Bitcoin, could lead to a ten-year jail sentence and/or fine.

At the same time, the Reserve Bank of India and its partners have purportedly also proposed the creation of a “Digital Rupee” to fill in the void left by a ban on Bitcoin. This exact strategy has purportedly been “recommended by a panel headed by Economic Affairs Secretary Subhash Chandra Garg”, and has been backed by an array of other respected governmental agencies.

This article purportedly killed Koinex’s volume, with the platform’s co-founder claiming that this draft bill created a mass amount of “FUD” which resulted in a “sharp decline in trading volumes” and an anti-crypto stance from citizens of the nation. Per data from The Block, the volume on Koinex has, in fact, plummeted. Since hitting $9.7 million of aggregate volume in September 2018, this figure has been halved to $4.3 million. Ouch.

The weird thing is that as reported by Ethereum World News previously, the Reserve Bank of India has denied any involvement in any new crypto ban. In a statement issued June 4th (prior to this news), the central bank claimed that it is not aware of any new plan for a ban. They explain that they were not forwarded any draft bill, if it exists at all, from any fellow financial regulator in India, nor was in communication with any other agencies on the subject matter.

This doesn’t imply that the draft bill doesn’t exist though, yet the RBI should be involved if it truly is in the works.

Regardless, many note that if the ban was put in place — if it does exist after all — it may actually be a net benefit for the cryptocurrency space. This is in reference to the Streisand effect and the theory that consumers like to oppose government control in some settings.

Photo by Mitchell Ng Liang an on Unsplash

The post India: Notable Crypto Exchange Shutters Ops Amid Bitcoin Ban Rumors appeared first on Ethereum World News.

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India: Another Crypto Exchange Closes Due to Regulatory Pressure

India’s proposed laws to introduce a 10-year jail term for dealing in cryptocurrency have been listed as a factor in Koinex’s closure.

Indian crypto exchange Koinex has ceased operations effective immediately, co-founder Rahul Raj confirmed in a blog post on June 27.

Raj said multiple delays by government agencies in clarifying crypto regulation have played a factor in the decision to close.

This month’s proposal to introduce a 10-year jail sentence for Indian citizens who use cryptocurrencies had also contributed to a “sharp decline in trading volumes.”

According to Raj, Koinex had experienced “regular disruption,” including denials when attempting to use payment services. He alleged this disruption extended to non-crypto transactions as well – with exchange employees asked questions by banks whenever they received their salary or attempted to pay their rent.

Warning that it was no longer economically feasible to serve customers, Raj added:

“The final decision has been taken after duly considering all the latest developments in the crypto and blockchain industry in India… Unfortunately we’re not too hopeful that things will change for the better in the near future.”

Raj said the exchange plans to refund frozen deposits to bank accounts over the next five weeks, and urged users to empty their crypto wallets by July 15.

In May, another Indian cryptocurrency exchange, Coinome, also announced that it was closing its doors because of regulatory difficulties.

Last week, it was reported that Facebook has not applied for approval to operate libra, its newly announced cryptocurrency, in India.