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Indian Parliamentary Panel Unhappy Over Crypto Stakeholders’ Focus On “Advocacy”

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Indian Finance Committee met key players in the crypto industry in Bengaluru on May 6. According to sources, the meeting did not turn fruitful as members of the finance body were apparently dissatisfied with the industry’s emphasis on “advocacy” instead of chalking out a plan to deal with risks like terrorism financing, for instance.

As per local sources, the parliamentary panel reportedly asked industry representatives to address its concerns on mitigating cross-border terrorism and money laundering. Besides that, it also requested members to present a model for regulation, and names of crypto-related firms.

In the meeting, the Committee stressed that the main focus should be on overall regulatory policy rather than individual industry concerns about new tax rules.

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Indian Parliamentary Panel Unhappy Over Crypto Stakeholders' Focus On "Advocacy" 2

“They haven’t done anything since the last time we raised concerns. It’s the same old thing. That’s what we chided the industry for. We are sick and tired of hearing advocacy, advocacy. Because they have to address the challenges that the government is putting forth, right? Plans, mitigation measures, or some kind of thing. I think that would go a long way,” an official present at the meeting remarked.

Tougher days ahead for Indian crypto exchanges

Its been quite an eventful month for the Indian crypto market. Since the tax came into effect, trading on digital asset exchanges in India took a nosedive, and to top that banks refuse to transmit payments to exchanges due to regulatory uncertainty. 

In general, we have seen trading volumes [on Indian exchanges] come down by 30%-40% in the last two to three weeks,” Nischal Shetty, founder, and CEO of WazirX, India’s biggest cryptocurrency trading exchange told in an interview.

Amid the sharp fall in the numbers, WazirX hinted at relocating its operations overseas, especially in Dubai.

However, it is not only WazirX that is reported to move out of India. The stringent tax rules have driven crypto talent to flock to friendlier regimes, with a few hoping things to improve soon.

Previously TronWeekly reported on Indian Tax authorities exploring ways to bring income generated from crypto platforms operating outside India under the lens, sources familiar with the matter said.

Kraken receives UAE’s nod to operate as a Regulated Crypto Exchange

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US-based crypto exchange Kraken has been granted a Financial Services Permission [FSP] license from the Abu Dhabi Global Market [ADGM] to operate as a regulated exchange platform in the United Arab Emirates [UAE].

For those unfamiliar, ADGM is a free zone for financial entities to do business in the UAE capital and provide services to users within the region. According to a press release, Kraken would cater to the needs of the Middle East and North Africa [MENA] region.

Kraken met all the required criteria from the Financial Services Regulatory Authority [FSRA] of ADGM to operate as a digital asset Multilateral Trading Facility [MTF] and Custodian in Abu Dhabi and the wider UAE, the release added.

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Elated over the development, Curtis Ting, Kraken’s managing director for Europe, the Middle East, and Africa, stated in an interview,

“We’re incredibly excited to be able to set up our operations right in the ADGM [Abu Dhabi Global Market] itself to operate a virtual asset platform that finally offers Dirham pairs for investors in the region.”

Kraken says this is a first-of-its-kind full-fledged financial license from ADGM which the trading platform aims to capitalize on by providing seamless access to cryptocurrencies through regulated funding, trading, and custodial services in the local currency dirhams.

In terms of why so many crypto firms are flocking to the region, Ronit Ghose, global head of fintech and digital at Citi cited “greater regulatory clarity” as the reason behind the influx of cryptocurrency businesses in Dubai and Abu Dhabi.

Kraken sees the UAE as one of the most lucrative markets

Kraken, founded in 2011, operates in over 60 nations, said the UAE launch marks its entry into an increasingly lucrative region. According to Chainalysis, the Middle East is one of the fastest-growing cryptocurrency markets in the world, making up 7% of global trading volumes.

The UAE transacts roughly $25 billion worth of cryptocurrency each year. It ranks third by volume in the region, behind Lebanon [about $26 billion] and Turkey [$132.4 billion] as per Chainalysis data studied between July 2020 and June 2021. 

With the latest approval, Kraken joins several exchanges setting up shop in the UAE amidst stricter rules and tighter regulations for crypto businesses worldwide.

Robinhood grabs other stars as it lets go of one

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Christine Brown, the Robinhood executive in charge of the trading platform’s cryptocurrency ambitions, announced her departure in a tweet on Tuesday. Brown, who worked at the firm for five years, said she would stay in the crypto area, although she didn’t say what venture she would be engaged with. Brown said,

“I’m moving on to start something new. I joined RH when it was under 100 people—before we even offered a crypto product. Watching us grow through IPO and serving more than 22m users has been the greatest professional experience of my life.”

Furthermore, Robinhood Chief Operating Officer Gretchen Howard told local media,

“We’re so grateful to Christine for her contributions over the past five years – from leading our self-clearing initiative to scaling our Crypto team. We’re excited to follow her entrepreneurial journey going forward.”

Robinhood gets closer to its all-around-the-clock dream

Because RH Markets hasn’t been able to grow its user base in recent quarters, the company is doing the next best thing: providing existing consumers even more trading time. Customers will be able to purchase and sell shares from 7 a.m. until 8 p.m. Eastern time, according to the investing app.

Customers can trade from 9 a.m. to 6 p.m. today on Robinhood. They can now log on after work or other duties, or check their phones first thing in the morning, thanks to the extra hours.

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The more clients can trade equities around the clock, the more the stock market will mirror the cryptocurrency market, where traders sometimes feel compelled to follow Asian markets after they go to bed, and even on weekends. Robinhood has also advocated for quick transaction settlement, which it claims will reduce client risk. It also has the potential to lower the company’s capital requirements.

After-hours trading was once thought to be too risky for typical investors, but in the last two decades, electronic trading and looser rules have made after-hours trading accessible to a far larger number of investors.

Retail traders should have the same access to services as institutional traders, according to RH, and this new functionality reflects that attitude. At the same time, it appears to contradict RH’s recent shift toward encouraging investors to use tried-and-true investment practices. Although Robinhood has been known for its speed, this may not be a competitive advantage.

Japan Tightens Forex Norms To Block Russia’s Crypto Escape Route

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Japan is currently working to revise its foreign exchange law to prevent Russia from circumventing Western financial sanctions through cryptocurrency assets, top government officials announced on 28 March.

Hirokazu Matsuno who is the Chief Cabinet Secretary revealed in a press conference that a revised draft of the Foreign Exchange and Foreign Trade Act would be submitted in the ongoing parliament session.

Even the country’s premier Fumio Kishida voiced his support for the law to be amended in a Monday parliament session, where he stressed the need for coordinated moves with Western allies after attending last week’s Group of Seven summit in Belgium.

A finance ministry official told Reuters that discussions are currently in progress about the proposed amendment, but refused to divulge any further details.

Japan's new Chief of Cabinet Secretary Matsuno Hirokazu announces new cabinet members, in Tokyo

Attempting to provide some clarity, Saisuke Sakai, senior economist at Mizuho Research and Technologies said, The revision “presumably enables the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinize whether their clients are Russian sanction targets.”

Japan has joined its western allies in slapping sanctions

Following the invasion of Ukraine, the Japanese government has imposed asset-freeze sanctions on more than 100 Russian officials, oligarchs, banks, and other institutions. It has also banned high-tech exports and revoked the most-favored-nation trade status for Russia, which calls its actions in Ukraine a “special military operation”.

Japan, a key US ally has been working in tandem with other nations, calling for stricter action on Russia. After G7 raised concerns in a written statement a few weeks ago, Japan immediately urged its crypto exchanges to not process transactions involving digital-assets subject to asset-freeze sanctions against Russia and Belarus.

The East Asian trading platforms which are among the most tightly regulated exchanges in the world grabbed headlines recently when they complied to implement Financial Action Task Force [FATF]’s Travel Rule on April 1. The Travel Rule essentially requires platforms to get rid of anonymity in crypto transactions in an effort to fight money laundering.

As per Japan’s regulator, the Financial Services Agency, the travel rule will improve transparency on the individuals and entities crypto exchanges deal with, as the government seeks to prevent sanctions-busting efforts.

FTX embarks into Australian crypto market

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Following the acquisition of a key financial license in Australia, prominent cryptocurrency exchange FTX has officially opened its doors, as reported by local media. The company’s CEO Sam Bankman-Fried announced its formal debut of FTX Australia during a virtual talk to a gathering assembled for the country ‘s yearly Blockchain Week.

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Sam Bankman-Fried, CEO of FTX

Following the acquisition of an undisclosed company that formerly held an Australian Financial Services Licence, the crypto exchange has established a local presence. Other big exchanges, such as Binance and Kraken, had previously created a local presence in the last two years, and this decision seems to be in line with them.

Australians have had access to the exchange’s global basis for a while, but FTX is seeking to be in the foreground of the regulatory curve by satisfying policymakers and engaging with authorities ahead of time. In addition, Bankman-Fried said,

“We’d love to work with regulators and lawmakers on understanding the crypto ecosystem and build out regulatory frameworks for analyzing them.”

He went on to say that the firm was doing everything it could to help build a strong, healthy ecosystem in the country that prioritized consumer protection. According to a statement released on Sunday, the domestic exchange would offer most of its parent company’s bells and whistles while offering its goods in the crypto derivative and spot markets. It has also been announced that options contracts, futures contracts, contracts for difference, and leveraged tokens will be issued by FTX Australia, which will be based in Sydney.

Australia serves FTX as regional hub

When asked why he thought Australia was a significant territory that global exchanges should pay attention to, the 30-year-old CEO said the country had a huge chance to advance the rest of the continent through innovation.

According to the exchange, the establishment of an Australian subsidiary highlights the firm’s long-term commitment to the local market and is the inevitable next stage in its global expansion.

Furthermore, the exchange was awarded a licence to operate in the United Arab Emirates this week, following the passage of the UAE’s Virtual Asset Regulation Law, which also established a watchdog to oversee the nascent industry.

Crypto.com Expands Its Offering Into US Market; More Details

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Singaporean crypto exchange Crypto.com has now made its grand entry as it prepares the initial rollout of its services to users in the United States. Based on an announcement post on its website, the trading platform revealed that it is already open to waitlisted users, and would incorporate more clients in the coming months.

In accordance with the blog, VIP users will have access to events, rewards, and market insights. Moreover, the trading platform promised to provide these users access to exclusive forums. At the moment, those features can only be used by selected institutional investors. But assured others that they are working to make it available to more people very soon.

Elated on the launch, Kris Marszalek, the CEO of the platform said,

“We are excited to be expanding our offering for professional traders to the U.S. Crypto.com Exchange will support U.S. institutional investors through this initial launch phase. We are looking forward to rolling it out to everyone as soon as possible.”

Crypto.com Massive Marketing Push

The crypto exchange had embarked on a string of aggressive marketing efforts, last year. The platform has invested $100 million in the campaign, which covered more than 20 countries and ran for “several months.” Entitled “Fortune Favors the Brave”, the ad starred Hollywood biggie Matt Damon and is directed by Oscar-winning cinematographer Wally Pfister.

The privately-owned Singapore firm has managed to seep into the mind of everyday Americans by betting high on sports advertising. As a matter of fact, Super Bowl advertising reaches around 100 million viewers. Utilizing this strategy, the platform demonstrated its marketing prowess with a commercial on Sunday’s Super Bowl and a $700 million deal last year to rename the Staples Center in Los Angeles as the Crypto.com Arena.

Not only that, the trading platform went on a series of high-profile partnerships including one announced last month with basketball superstar Lebron James of the Los Angeles Lakers, who will play their home games at the Crypto.com Arena. Its Super Bowl ad featured James telling a younger version of himself: “If you want to make history, you gotta call your own shots.”

Coinbase outlines a multi-layered global sanctions program

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Leading crypto exchange Coinbase announced implementing a plan in order to comply with the current global sanctions. The platform through its blog rolled out steps to initiate the compliance program which it mentioned would help protect ‘the integrity of all transactions supported by its platform’.

The post, written by Paul Grewal who is the Chief Legal Officer of Coinbase then talked about the measures it has adopted while adhering to economic penalties.

First, it worked on screening out sanctioned individuals or entities prior to providing accessibility. They use geofencing controls to block access to the Coinbase website, products, and services, by anyone using an IP address in a sanctioned geography.

Next, they monitor against evasion attempts. According to the blog, Coinbase regularly updates the global sanctions lists and works to map transactions beyond the entities and individuals specifically flagged by governments.

To safeguard against malicious attacks, Coinbase maintains a sophisticated blockchain analytics program to identify high-risk behavior, study emerging threats, and develop new mitigations. The platform cited an example in a 2020 case where it identified over 1,200 additional addresses potentially associated with the sanctioned individual.

Besides that, the platform till now has prevented access to over 25,000 addresses related to Russian individuals or entities believed to be engaging in illicit activity. “Once we identified these addresses, we shared them with the government to further support sanctions enforcement,” the blog added.

Coinbase- Crypto can deter evasion attempts

On the role of digital assets’ ability to deter fraud, the report argues that crypto transactions are ‘traceable, permanent, and public.’ which is makes it competent enough to detect and deter evasion compared to the traditional financial system.

Amidst fears that Russia might use crypto to circumvent sanctions, several digital asset platforms have announced plans to prevent that.

One of them is Gemini which in a recent interview revealed that it is taking measures to stop those trying to evade sanctions on Russia. Another cryptocurrency firm, eToro announced that its investment platform is not open to users in Russia. A spokesperson further added that eToro is “rigorous in its compliance with all relevant rules and regulations, including sanctions.”

VALR obtains $50M in largest African crypto raise

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VALR, a South African cryptocurrency exchange, said today that it has secured $50 million (about R750 million) in Africa’s largest-ever cryptocurrency fundraising phase. The firm is now worth $240 million (R3.7 billion), according to reports.

VALR is a digital asset marketplace based in Johannesburg, South Africa, that enables clients to purchase, sell, store, and trade Bitcoin and other cryptocurrencies in a secure and simple manner. It has a large number of digital assets. The company’s purpose is to assist in the development of a financial system that respects humanity’s unity.

Pantera Capital led the firm’s oversubscribed Series B equity funding round, which included Alameda Research, Cadenza, CMT Digital, Coinbase Ventures, Distributed Global, GSR, Third Prime, Avon Ventures, a venture capital fund affiliated with Fidelity Investments’ parent company, as well as existing investors Bittrex and 4Di Capital and others.

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Pantera Capital

VALR allows its consumer to order, trade, and hold Bitcoin and 60 other cryptocurrencies in a secure environment—the most of any network in Africa—at some of the lowest costs in the world. Since its introduction in 2019, VALR has operated over $7.5 billion (R115 billion) in trading volume and now serves over 250,000 individual users and 500 institutional clients from around the world.

Farzam Ehsani, VALR CEO and co-founder said,

“We already help VALR’s customers enter this new world of crypto from the traditional financial system using their USD or ZAR, and I’m very excited that this round of funding will allow us to serve so many more across Africa and the world.”

VALR series A fund raise in 2020

In July of 2020, the company raised $3.4 million in a Series A round. VALR had planned to grow into emerging markets across South Africa and introduce services such as derivatives trading and financing at the time. The company’s value has increased tenfold since then.

Furthermore, the funds raised will be utilized to develop across Africa and into other burgeoning areas like India, as well as to provide more products and services to the company’s growing worldwide customer base. The firm is also expanding its employment efforts across the board.

Huobi exchange to resume operations in the U.S.

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Huobi Group, a worldwide cryptocurrency exchange, is returning to the United States after an unexpected withdrawal over a year ago.

Huobi US (HBUS), another Huobi Group statutory firm, halted operations in December 2019 due to regulatory issues. The departure, according to the corporation, was expected to be the next factor in developing its activities more compatible with US legislation and rules at the time.

Du Jun, one of the company’s co-founders stated,

“In 2018, we tried to enter the U.S. market but we quickly withdrew ourselves because we didn’t have a strong commitment to the market at that time and we didn’t have a good management team in the U.S.”

Du Jun, on the other hand, did not specify which business the company would undertake first upon its return to the United States. Returning to the US market might put the Chinese crypto exchange in close conflict with companies such as Coinbase.

Since then, the Seychelles-based exchange has been considering several options for re-entering the US market. The company’s Group global head Ciara Sun had stated in April that the exchange may partner with a fully licensed agency in the United States to run its operations throughout the country. According to CoinGecko, Huobi is among the top ten largest cryptocurrency exchanges in the world by trading volume.

Huobi opened its first cryptocurrency exchange in the United States in 2018. The following year, the firm said that user accounts in the United States would be frozen and that they will return to the industry in a more comprehensive and effective manner.

BabyDoge listing on Huobi

In other news, BabyDoge was listed on the Chinese exchange on 18, February 2022 at 9.00 a.m. UTC. It also said that Spot trading for BabyDoge in on the exchange, on the other hand, would only be accessible if the deposit volume meets the market demand. The firm also stated that it would tell investors in advance if they decided to open spot trading slots.

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At the time of writing, BabyDoge was priced at $0.000000003283 and had risen by 4.5% over the last 24 hours.

Furthermore, many worldwide crypto exchanges are still having trouble obtaining licenses from state authorities in the United States, particularly for their fiat-crypto trading operations. Nonetheless, the Chinese crypto exchange’s move has provided the organization with a boost in terms of worldwide expansion.

India’s major crypto players fear repercussions surrounding the new tax law

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India’s crypto community who were rooting for regulatory clarity got their wish fulfilled when the government recently announced to legalize digital assets and levy 30% tax with no deductions or exemptions with effect from April 1, 2022. But now a section of them feels the TDS [tax deductible at source] aspect is counterproductive.

As per sources, members of the Blockchain and Crypto Assets Council [BACC] view that the 1% TDS tax-deduction to every single transaction involving crypto, would drive small traders towards informal Person to Person [P2P] trading and decentralized exchanges [DEX].

On 5th February 2022, BACC convened a meeting where major crypto exchanges took part and had a discussion on the matter. Following this, the industry body has decided to get in touch with relevant policymakers and apprise them about the issues arising out of the proposed TDS structure by the government.

How does the proposed TDS affect India’s crypto ecosystem?

According to the Finance Bill, a new section 194S will be added from July 01, 2022. Any Buyer of Crypto will have to deduct 1% of the payment to the seller.

An Indian tech-consultant-Naimish Sanghvi wrote a detailed post on his Twitter where he pointed out TDS’s lack of clarity on implementation in case buyers trade on centralized exchanges and place orders on an open order book or International exchange trading which has no such provision.

In both the cases, Sanghvi wrote ‘Buyers have no clue who the seller is. Who deducts the TDS? Who pays it to the Government?’

Apart from that, the industry body feels that the most affected would be the day traders who make multiple trades per day, often with small margins. Therefore, the volume of the TDS payouts could be huge and stands at a higher chance of running out of capital.

Sumit Gupta, CEO & co-founder of CoinDCX, a member of BACC stated,

“Specific sections regarding TDS are still confusing. We believe multiple discussions are needed to come up with better systems or processes. We are very hopeful that the right actions will be taken. We are happy that the industry has got clarity and confidence. However, I would also like to point out that it’s two steps forward and one step back.”

Having said that, BACC is planning to hold several ‘knowledge sessions’ for legislators to brief them about the workings of the exchanges and the taxes implications on their revenue models.