The country wishes to see all crypto activities take place on platforms regulated by SEBI.
On Tuesday, BloombergQuint (Bloomberg India) reported
that the penalty for non-compliance with the Indian government's crypto
policies could range from a maximum fine of 20 crore rupees ($2.7
million dollars) or 1.5 years in jail. Prime Minister Narendra Modi will
likely give cryptocurrency investors a deadline to comply with new
rules and declare their assets. While the regulatory environment in the
country holds a high degree of uncertainty, reports have indicated
that investors' crypto must soon be held in exchanges operating under
the oversight of the Securities and Exchange Board of India, or SEBI.
This
would mean that private wallets would not be legal under the proposed
legislation, and investors who use them could be subjected to the
aforementioned judicial penalties. In addition, Modi's government plans
to institute a minimum capital threshold for investing in
cryptocurrencies.
India is taking a hard-line stance against crypto due, in part, to the perceived rise in fraud, money laundering and terrorist financing
in recent years. Another element, however, is that the competition from
privately-owned or privately-issued cryptocurrencies would, in theory,
threaten the Reserve Bank of India's plans to launch a digital rupee.
The official text from an ongoing controversial crypto bill in the
country is as follows:
"To create a facilitative
framework for the creation of the official digital currency to be issued
by the Reserve Bank of India. The Bill also seeks to prohibit all
private cryptocurrencies in India; however, it allows for certain
exceptions to promote the underlying technology of cryptocurrency and
its uses."
