How tech-savvy traders are bypassing govt’s crypto block

How tech-savvy traders are bypassing govt’s crypto block

  • News
  • January 20, 2024
  • No Comment
  • 7

[ad_1]

“We are aware of access to offshore crypto platforms being available through VPNs, and we are working to figure out a way around it,” Meity secretary S. Krishnan said. “However, it isn’t a question of enforcing regulatory roadblocks; we will need to find a technological solution to block offshore exchanges despite VPNs.”

Tech-savvy users see the IP block as a minor hindrance that they are willing to overcome, especially because all crypto trades on Indian exchanges attract a 1% tax deducted at source (TDS), and there is greater liquidity on global cryptocurrency exchanges.

To be sure, the use of VPNs could slow the minor revival seen on Indian cryptocurrency exchanges when the global IPs were blocked.

Even a first-in-two-years bull run in crypto, especially in the US, doesn’t guarantee higher volumes because users can easily bypass Indian exchanges and transact directly with the likes of Binance (the world’s top crypto exchange with daily average trading volume of $14.86 billion, as per tracker Coinmarketcap) and others.

The blocking of global crypto IPs followed a recommendation to that effect on 28 December from the finance ministry’s financial intelligence unit (FIU) due to the exchanges’ non-compliance with India’s Prevention of Money Laundering Act (PMLA), 2002.

The FIU notice, and the subsequent blocking, did help in reviving Indian exchanges’ volumes to a certain extent.

Minal Thukral, executive vice-president and head of growth and strategy at CoinDCX, claimed CoinDCX saw a 200x surge in weekly crypto deposits in the week following the FIU notice, in comparison to the week prior, “and they are coming from mostly other exchanges”. He also added that CoinDCX’s daily trading volume has “almost doubled” since the notification, without furbishing absolute figures.

“Most new users would not want to live under the regulatory uncertainties of whether their investments may be frozen from the flexibility to withdraw due to regulations,” Thukral said.

“Plus, retail users would want to cash in on the bull run that the market is on, and is likely to witness through 2024.” Rajagopal Menon, vice-president of fellow cryptocurrency exchange WazirX, painted a similar growth picture. “Towards the end of the September quarter, our annual crypto trading volume had dropped to around $4 billion per year from a high of $43 billion that we saw in early 2022.

“Now, we are near an average annual trading volume rate of around $8 billion—which is double of what we had dropped to,” he said.

“We’re still far, far away from where we had peaked; our trading volumes have been down by over 90% since our highs,” Menon added.

“This won’t return in a rush, even as 2024 promises to be a bull year for the global crypto industry.” In comparison, data from Coinmarketcap showed CoinDCX’s and WazirX’s trading volumes at $6.58 million and $2.72 million, respectively, as of Friday.

Balaji Srihari, business head at CoinSwitch, said that the exchange’s weekly trading volume rose by up to 35% in the week following 28 December, when FIU issued its notice to the offshore exchanges.

CoinSwitch’s exact trading volume data could not be ascertained.

A senior official close to developments on this matter said that WazirX has also worked with the FIU in order to ensure compliance with India’s financial bylaws, which could be beneficial for it in the long run.

Meanwhile, a global crypto bull run is being fuelled by a resurgent Bitcoin token. Since falling to a low of around $24,900 last September from a high of $68,000 in November 2021, the world’s largest crypto token recovered to over $48,600 on 11 January, on the day the US Securities and Exchange Commission (SEC) approved investment firms to create exchange-traded funds (ETFs) for Bitcoin. In three days of trading, Reuters reported that Bitcoin ETFs have crossed $2 billion in trading volume.

However, not all parties have been so enthusiastic. At the Mint BFSI Summit and Awards held the same day (11 January) in Mumbai, Reserve Bank of India governor Shaktikanta Das said that India’s “position on cryptocurrency remains unchanged—I do not think emerging markets can take to crypto mania”. JP Morgan chief Jamie Dimon also spoke against Bitcoin’s value, questioning optimists on the crypto token.

All of these come together as challenges that India’s exchanges must navigate before potentially seeing a steady surge in business. WazirX’s Menon added that there’s also a question of volatility, but the likes of BlackRock investing in Bitcoin could help stabilize the market.

“Yes, there could be volatilities to the tune of nearly 30%, but Bitcoin will revive in value, and long-term investors won’t exit. Bulk investors, though, will continue to find a way to invest through global exchanges, until India finds a way to revise the impact of the 1% TDS on all crypto trades.”

[ad_2]

Source link

Related post

Rolletto Bonus Codes: 03 2021

Rolletto Bonus Codes: 03 2021 Content Crypto Leo promo code: 150% welcome bonus How to make a withdrawal with ePay Mega…

Melbet Русский Мелбет Вход-Регистрация

Melbet Русский Мелбет Вход-Регистрация If you are right, the prize money will be credited to your account immediately. After that, you…

Playamo Casino Reviews, Ratings & Reviews 2021 + Bonus

Playamo Casino Reviews, Ratings & Reviews 2021 + Bonus Content CONTACTS, SUPPORT Discount coupon LSbet pragmatic play drops & wins tournament…

Leave a Reply

Your email address will not be published. Required fields are marked *