Just-In: India Takes Cautious Approach Towards Crypto After FTX Crisis

Nirmala Sitharaman, Minister of Finance for India, tables the 2022-2023 economic study in Parliament today. While the crypto community in India hopes that crypto taxes will be eased, The Government of India has little chance of changing its strict position against cryptography, Especially after the crypto exchange meltdown, actually, India has the potential to push for a common global standard for the regulation of the crypto ecosystem.

India reiterates its strong position against cryptography in an economic study.

Nirmala Sitharaman, India's Minister of Finance, maintained his strong stance against cryptography. Last year, sitharaman presented the 2022 finance law that imposed a 30% tax on profits and a 1% tax deducted at source (tds). This has resulted in a massive decline in crypto transaction volumes in India, despite increased adoption of cryptography.

The Economic Survey 2022–2023 highlights how the recent collapse of the crypto exchange FTX and selloff in the crypto market raises concerns over the vulnerabilities in the market. He also quoted the Federal Reserve's joint statement, Government of Canada Deposit Insurance Corporation (fdic), and the Office of the Money Controller (occ) pointing out concerns about risks to the banking system.

Recognizing that the crypto market is borderless, the Indian government is seeking a comprehensive approach to regulating cryptography. Ftx contagion continues to have an impact on the market with crypto companies, including genesis, dcg and gemini at risk of bankruptcy. Genesis Trading’s lending business Genesis Capital filed for bankruptcy this month.

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Tax concessions for the crypto community.

While the Indian crypto community hopes the Government of India will reduce the tax burden and TDS to 0.1%, the government may have other plans. Former Finance secretary of Subhash Chandra Garg says “c taxes need a lot more clarity and he might not see any new changes in the upcoming

India-based crypto exchanges such as CoinDCX and WazirX have released proof-of-reserves (PoR), showing transparency and building a strong foundation on the pillars of trust, safety, and security. But India's cautious post-FTX approach will have an impact on the crypto community in India.

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