Category Archives: Cryptocurrency
What is the best time to invest in cryptocurrency? – Economic Times
Investments are about managing risks and maximising gains. Over the past few decades, risk averse Indian investors have enjoyed the choice of picking assets such as fixed deposits, gold and even realty for assured gains. Assets with higher risks involving stocks, derivatives and other managed funds have remained exclusive to some top tier investors who have the means and the knowledge to access such markets. Beating inflation with low risk assets alone is proving difficult in the post-pandemic world. Enter cryptocurrencies, a new asset class with high potential, accessibility and with possibilities of managing risks.
The global crypto market runs 24x7 with equal access to all investors without a bias for geography or nationality. It is a nascent, decade-old market with potential to grow multi-fold over the next few years. More than one crore Indians have already embraced cryptocurrencies with a 600+ per cent growth in cumulative investments in the last one year, according to Chainalysis, a leading compliance provider.
For those ready to dip their toes into the cryptocurrency world, discerning the best time to invest is key. The crypto market is notoriously volatile with as much as 30 per cent variance in prices within a day. However, managing risk is possible and within everyones reach. We continue to advise investors to only invest a minor share of the overall portfolio (up to 3 per cent) in cryptocurrencies. Strategies vary according to individual goals and risk appetite but the following approach works in general even for amateurs.
The entry pointA proven method of managing entry points is to do Dollar Cost Averaging (DCA). DCA is a straightforward investment strategy that works irrespective of the current price of an asset. Investors following DCA split the investment pool and buy assets at regular intervals of time. This strategy minimizes volatility risk as it would prevent an entry at a single price point.
2021 is still earlyGlobally, there are about 120 million investors in cryptocurrencies in a world with a population of 7.8 billion. The adoption is growing rapidly but there is potential for more. Compared to the global stock market capitalization of about $100 trillion, the cryptocurrency market is valued less than 2 per cent today. So, entering any day in 2021 will still be good enough for most investors.
The only consideration for investment today is to determine which cryptocurrencies will continue to exist five years from now. Bitcoin, Ethereum and other large market cap coins have a higher probability of existence and hence are relatively safer to start with.
(Vikram Subburaj is Chief Executive Officer & co-founder, Giottus Cryptocurrency Exchange. Views are his own)
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What is the best time to invest in cryptocurrency? - Economic Times
Cryptocurrency Will Take Over Rupee and Dollar in Future – Analytics Insight
Without a question, digital currency is the way of the future. Slowly but definitely cryptocurrency will take over Rupee and Dollar by the end of this decade. Paper money will become obsolete and people will store money on their mobile phones. Cryptocurrency will take over Rupee and Dollar or paper money but it will very certainly continue to be a part of our life in the future, whether in the shape of money, investment choices, commodities, assets, or some other form.
A cryptocurrency is a digital currency that is protected by cryptography, making counterfeiting and double-spending almost impossible. Many cryptocurrencies are built on blockchain technology, which is a distributed ledger enforced by a global network of computers. Bitcoin is a decentralized digital currency that may be transmitted from user to user on peer-to-peer Technology without the use of middlemen. It has no central bank or single administrator. So, we can say that Bitcoin is the most well-known cryptocurrency, for which blockchain technology was developed.
As cryptocurrencies have grown in popularity, IT executives have been more interested in learning more about them. In general, there are two groups: one believes that all virtual currencies are a hoax that can burst at any time, and the other believes that they are all scams. The second group believes that it has a promising future and will soon replace real money. At this point, it is unclear who is correct and how these technologies will develop in the future. There is, however, little dispute regarding the underlying technology, which is blockchain. Cryptocurrencies are unquestionably growing in popularity as a result of their exponential returns in a short period of time.
Different nations governments may or may not allow that cryptocurrency will take over Rupee and Dollar. Several countries have already enacted prohibitions and limitations, restricting Cryptocurrency trading. Over 7 million people in India have already invested over USD 1 billion in cryptocurrencies. This number is steadily rising, as the government has chosen to reconsider its prior position of banning all cryptocurrencies outright. The government has announced the creation of a new bill, Cryptocurrency, and Regulation of Official Digital Currency Bill.
This might be the first step toward cryptocurrency legalization in India. The Reserve Bank of India is also developing digital money. The time has come to leverage its applications while at the same time strengthening the digital infrastructure, RBI governor Shaktikanta Das said. As a result, the day will come when we must deal with digital currencies on a regular basis.
Every economy is based on the governments ability to manage its currency. In reaction to external and internal forces, the government can decide how much of a currency should be produced. If cryptocurrencies take the place of the rupee or the dollar, that power is lost.
It is a little bit difficult that Cryptocurrency will take over Rupee and dollar completely, or any other kind of paper money. It is more feasible to co-exist with paper money and cryptocurrency, which is why rules become more necessary. Cryptocurrencies are now sensitive to responses from big investors, participants, stakeholders, observers, and even government decisions. It will be protected against all of this by a regulatory framework.
Apart from cryptocurrencys appealing features such as low transaction fees, fast transaction times, expanded payment options, simple currency exchange, and decentralized architecture, it also has some drawbacks that must be addressed before cryptos, can be legalized, such as price volatility, anonymity, cybersecurity, environmental impact and the lack of a refund or cancellation mechanism. Bitcoin has risen 193,639.36 % since 2012, despite all of these certainties and uncertainties. The user index for 2021, according to Binance Research, has 97 percent confidence in cryptocurrency.
Money has developed and taken on new forms over time. In reality, paper money did not become widespread until the seventeenth century. However, there are several obstacles in taking over the paper money. But cryptocurrency will take over Rupee and Dollar. No matter what, the future would be digital. It is very much obvious. Technological developments have changed the way people live and have had an influence on nearly every aspect of our life. It wont be long before virtual assets outnumber physical ones in terms of value. Our gold, land, money, and other real assets may soon be supplanted by digital equivalents. We will be better equipped to face future difficulties if we embrace them sooner rather than later.
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Cryptocurrency Will Take Over Rupee and Dollar in Future - Analytics Insight
Cryptocurrency investor warns government oversight could create bad regulation – Fox Business
Digital Chamber of Commerce chairman Matthew Roszak says though the Senate blocked cryptocurrency regulation in the infrastructure bill, it created potential for bad regulation in the U.S.
Chamber of Digital Commerce Chairman and cryptocurrency investor Matthew Roszak reacted to Lionel Messi receiving crypto payments from his transfer contract on FOX Business' "Mornings with Maria" Friday. Roszak said as more public figures like Messi enter the crypto market, it creates the potential for "bad" government regulation.
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MATTHEW ROSZAK: In the U.S., there's very good clarity on Bitcoin that's taxed as property. But, you know, going back last week, we had this infrastructure bill that was getting bobbled around D.C. and, there's some potential for bad regulation out there.
But we have some amazing people within Congress working with the industry. Sen. Cynthia Lummis, Warren Davidson. We have a blockchain caucus.
And look, we have to be careful. We need to get this right. Otherwise, a lot of this innovation will go offshore. And we have an amazing opportunity on the scale of the Internet 20-plus years ago to kind of play into this new DeFi world and its new Web3 world.
CRYPTO WARS: BIDEN ADMINISTRATION AT WAR WITH ITSELF OVER REGULATION
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Chamber of Digital Commerce chairman Matthew Roszak says Lionel Messi made a smart move by including cryptocurrency earnings in his transfer contract to Paris Saint-Germain.
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Cryptocurrency investor warns government oversight could create bad regulation - Fox Business
$1 trillion infrastructure bill: How two cryptocurrency amendments began a conversation on digital rights – Vox.com
Senate deliberations continued over the weekend over a $1 trillion infrastructure bill, with a particular focus on how the bill could impact the world of cryptocurrency. The infrastructure bill, known as HR 3684, allocates money to build roads, bridges, transportation systems, and support clean energy, among other developments. The bill includes a tax provision that outlines plans to raise about $28 billion for that $1 trillion package through taxes from crypto transactions.
As we know, cryptocurrency is a digital asset that more and more people are investing in. We should want that to continue, and continue in a healthy and sustainable way, said Sen. Rob Portman (R-OH) during Sundays Senate session. Portman, along with other senators, proposed an amendment to the bills cryptocurrency tax provision in order to quell concerns over digital rights. However, Portmans was the second proposed amendment that dealt with this concern. The two competing amendments illuminate the concerns of those in the crypto space who are particularly unhappy with one key word in the tax provision: broker.
The bill identifies a broker as anyone responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person, and anyone thus identified would be subject to tax reporting requirements. That appears to include people like miners, who use a proof of work system by solving algorithms with computers and software that, if correct, serve as verification for crypto transactions. Miners dont have customers, so they wouldnt be able to get access to the information necessary to complete a 1099 tax form something the provision requires brokers submit. Brokers must also submit reports of any transactions over $10,000 to the Internal Revenue Service (IRS), which was already required of them before the bill was proposed.
Digital rights nonprofit the Electronic Frontier Foundation (EFF) believes such requirements are also an issue of privacy. The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users, the foundation wrote in a statement issued last week.
Cryptocurrencys decentralized financial system and its blockchain transactions dont tie information to an individual, but rather to the series of transactions that came before, thus cryptocurrency marketplaces do not easily allow for the collection and reporting of information on users. Twitter CEO Jack Dorsey weighed in on the current state of crypto discussions. Forcing reporting rules on Americans who develop software and hardware, who mine and secure the network, or who run nodes to build resilience and efficiencies, is an impossible ask that will only drive development and operation of this critical technology outside the US, tweeted Dorsey.
The tax provision has met pushback from other digital rights advocates, like the nonprofit Fight for the Future, which urged supporters to call senators and encourage lawmakers to reconsider the crypto regulations. We feel strongly that policies that impact peoples basic civil liberties and peoples rights in the digital age should never be tacked on to legislation like an infrastructure bill, Evan Greer, director of Fight for the Future, told CNN. Additional backlash came from cryptocurrency stakeholders like Square, Coinbase, and RibbitCapital, that were among a group of entities to sign onto a joint letter addressing the bills shortcomings and encouraging alternatives.
In response to the criticism, Sens. Cynthia Lummis (R-WY), Ron Wyden (D-OR), and Pat Toomey (R-PA) proposed an amendment to the bills tax provision that would reinstate protections for individual investors. The amendment releases entities including miners, software designers and protocol developers from the need to report data that would be difficult or impossible for them to collect. Specifically, if passed, the amendment would exempt brokers from the following reporting requirements:
(A) validating distributed ledger transactions (B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or (C) developing digital assets or their corresponding protocols by other persons, provided that such other persons are not customers of the personal developing such assets or protocols.
And then theres the proposed amendment from Sens. Mark Warner (D-VA), Rob Portman (R-OH), and Kyrsten Sinema (D-AZ), which is also backed by the White House. The Warner-Portman-Sinema amendment would exempt traditional cryptocurrency miners who participate in time-consuming proof of work (PoW) systems like Bitcoin and Ethereum 1.0 from the financial reporting requirements outlined in the tax provisions. However, it would maintain the reporting requirements for those using a proof of stake (PoS) system used by many altcoins (cryptocurrencies other than Bitcoin), which is less energy-intensive and gives mining power based on the percentage of coins held by a miner.
Currently, only altcoins (any cryptocurrency other than Bitcoin) use PoS systems, which leaves their users at more of a disadvantage if the Warner-Portman-Sinema amendment were to be passed. From a legislative perspective, though, this option may be more attractive, and has more administration support.
White House press secretary Jen Psaki praised the Warner-Portman-Sinema amendment because the administration believes it strikes the right balance and makes an important step forward in promoting tax compliance. Treasury Secretary Janet Yellen spoke with lawmakers Thursday about concerns over the Wyden-Loomis-Toomey amendment, implying that they should instead support the Warner-Portman-Sinema amendment, according to the Washington Post.
This rift between supporters of the two amendments led to a more public rebuke of the Warner-Portman-Sinema amendment from one of the Wyden-Loomis-Toomey amendments authors. While I appreciate that my colleagues and the White House have acknowledged their original crypto tax had flaws, the Warner-Portman amendment picks winners and losers based on the type of technology employed, tweeted Toomey. The Warner-Portman plan exempts bitcoin miners, but not other transaction validators or software developers who create these platforms.
Some experts believe the conflict over the amendments entirely misses the point of just how difficult it is to regulate cryptocurrency. Writing for Coindesk, Angela Walch, a research associate at the UCL Centre for Blockchain Technologies, recommended lawmakers treat cryptocurrency as a separate issue rather than lumping it into a major spending bill.
Just because policymakers and regulators have allowed [the crypto financial system] to grow to its present state largely unchecked, does not mean that rapid-fire, piecemeal regulation is the best way to address the situation, she wrote.
Talks are ongoing as the Senate works to pass an infrastructure bill that has already been stymied in the past by cross-partisan differences. Given the chorus of voices across the political spectrum speaking out about cryptocurrency, the infrastructure bill appears to be more of a beginning than the last word on the future of how the US tackles crypto.
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$1 trillion infrastructure bill: How two cryptocurrency amendments began a conversation on digital rights - Vox.com
The IRS has seized $1.2 billion worth of cryptocurrency this fiscal year here’s what happens to it – CNBC
In June, the U.S. government casually auctioned off some spare litecoin, bitcoin and bitcoin cash.
Lot 4TQSCI21402001 one of 11 on offer over the four-day auction included 150.22567153 litecoin and 0.00022893 bitcoin cash, worth more than $21,000 at today's prices. The crypto property had been confiscated as part of a tax noncompliance case.
This kind of sale is nothing new for Uncle Sam. For years, the government has been seizing, stockpiling and selling off cryptocurrencies, alongside the usual assets one would expect from high-profile criminal sting operations.
"It could be 10 boats, 12 cars, and then one of the lots is X number of bitcoin being auctioned," explained Jarod Koopman, director of the IRS' cybercrime unit.
FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.
Michael Wayland / CNBC
Koopman's team of IRS agents don't fit the stereotypical mold. They are sworn law enforcement officers who carry weapons and badges and who execute search, arrest and seizure warrants. They also bring back record amounts of cryptocash.
"In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021, we're at $1.2 billion," Koopman told CNBC. The fiscal year ends Sept. 30.
As cybercrime picks up and the haul of digital tokens along with it government crypto coffers are expected to swell even further.
Interviews with current and former federal agents and prosecutors suggest the U.S. has no plans to step back from its side hustle as a crypto broker. The crypto seizure and sale operation is growing so fast that the government just enlisted the help of the private sector to manage the storage and sales of its hoard of crypto tokens.
The 2013 takedown of Silk Road a now-defunct online black market for everything from heroin to firearms is where federal agents really cut their teeth in crypto search and seizure.
"It was totally unprecedented," said Sharon Cohen Levin, who worked on the first Silk Road prosecution and spent 20 years as chief of the money laundering and asset forfeiture unit in the U.S. Attorney's Office for the Southern District of New York.
Silk Road, which operated on the dark web, dealt entirely in bitcoin. It was good for users, because it promised them some degree of anonymity. Despite the reputational hit, it was good for bitcoin at the time, helping to pump up its price by giving the token a use case beyond programming circles.
When the government began to dismantle Silk Road, federal agents had to figure out what to do with all the ill-gotten bitcoin.
"There was a wallet with approximately 30,000 bitcoin in it, which we were able to identify and seize. At the time, it was probably the largest bitcoin seizure ever, and it sold for around $19 million," said Levin.
"No one had ever done anything like it. In fact, there weren't really companies that you could go to in order to sell the assets. The Marshals Service stepped up and conducted their own auction of the assets where they took bids," she said.
That bitcoin batch went to billionaire venture capitalist Tim Draper. "It seemed like a large sum of money at the time, but if the government had retained those bitcoins, it would be worth way more today."
The cache of coins sold in 2014 would be worth more than $1.1 billion as of Wednesday morning. But hindsight is 20/20, and the government isn't in the business of playing the crypto markets.
What this entire exercise did accomplish, however, was to establish a workflow that remains in place today, one that uses legacy crime-fighting rails to deal with tracking and seizing cryptographically built tokens, which were inherently designed to evade law enforcement.
"I've just observed that the government is usually more than a few steps behind the criminals when it comes to innovation and technology," said Jud Welle, a former federal cybercrime prosecutor of 12.5 years.
"This is not the kind of thing that would show up in your basic training. But I predict within three to five years ... there will be manuals edited and updated with, 'This is how you approach crypto tracing,' 'This is how you approach crypto seizure,'" Welle said.
"'Follow the money' is not new. Seizure is not new. What we're just doing is trying to find a way to apply these tools and techniques to a new fact pattern, a new use case," he said.
There are three main junctures in the flow of bitcoin and other cryptocurrencies through the criminal justice system in the U.S.
The first phase is search and seizure. The second is the liquidation of raided crypto. And the third is deployment of the proceeds from those crypto sales.
In practice, that first stage of the process is a group effort, according to Koopman. He said his team often works on joint investigations alongside other government agencies think government arms such as the Federal Bureau of Investigation, Homeland Security, the Secret Service, the Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
"A lot of cases, especially in the cyber arena, become ... joint investigations, because no one agency can do it all," said Koopman, who worked on the two Silk Road cases and the 2017 AlphaBay investigation, which culminated in the closure of another popular and massive dark web marketplace.
Koopman explained that his division at the IRS typically handles crypto tracing and open source intelligence, which includes investigating tax evasion, false tax returns, and money laundering. Other agencies that have more money and resources focus on the technical components.
"Then we all come together when it's time to execute any type of enforcement action, whether that's an arrest, a seizure or a search warrant. And that could be nationally or globally," he said.
During the seizure itself, multiple agents are involved to ensure proper oversight. That includes managers who establish the necessary hardware wallets to secure the seized crypto. "We maintain private keys only in headquarters so that it can't be tampered with," Koopman said.
Once a case is closed, the U.S. Marshals Service is the main agency responsible for auctioning off the government's crypto holdings. To date, it has seized and auctioned more than 185,000 bitcoins. That cache of coins is currently worth nearly $7 billion, though many were sold in batches well below today's price.
It's a big responsibility for one government entity to take on, which is part of why the Marshals Service no longer shoulders the task alone.
The U.S. General Services Administration, an agency that typically auctions surplus federal assets such as tractors, added confiscated cryptocurrencies to the auction block earlier this year.
And just last week, following a more than yearlong search, the Department of Justice hired San Francisco-based Anchorage Digital to be its custodian for the cryptocurrency seized or forfeited in criminal cases. Anchorage, the first federally chartered bank for crypto, will help the government store and liquidate this digital property. The contract was previously awarded to BitGo.
"The fact that the Marshals Service is getting professionals to help them is a good sign that this is here to stay," said Levin.
The process of auctioning off crypto, in blocks, at fair market value, likely won't change, according to Koopman. "You basically get in line to auction it off. We don't ever want to flood the market with a tremendous amount, which then could have an effect on the pricing component," he said.
But other than spacing out sales, Koopman said, trying to "time" the market to sell at peak crypto prices isn't a thing. "We don't try to play the market," he said.
In November, the government seized $1 billion worth of bitcoin linked to Silk Road. Because the case is still pending, those bitcoins are sitting idle in a crypto wallet. Had the government sold its bitcoin stake when the price of the token peaked above $63,000 in April, coffers would have been a whole lot bigger than if they liquidated at today's price.
Once a case is closed and the crypto has been exchanged for fiat currency, the feds then divvy the spoils. The proceeds of the sale are typically deposited into one of two funds: The Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund.
"The underlying investigative agency determines which fund the money goes to," Levin said.
Koopman said the crypto traced and seized by his team accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor.
Once placed into one of these two funds, the liquidated crypto can then be put toward a variety of line items. Congress, for example, can rescind the money and put that cash toward funding projects.
"Agencies can put in requests to gain access to some of that money for funding of operations," said Koopman. "We're able to put in a request and say, 'We're looking for additional licenses or additional gear,' and then that's reviewed by the Executive Office of Treasury."
Some years, Koopman's team receives varying amounts based on the initiatives proposed. Other years, they get nothing because Congress will choose to rescind all the money out of the account.
Tracking where all the money goes isn't a totally straightforward process, according to Alex Lakatos, a partner with DC law firm Mayer Brown, who advises clients on forfeiture.
The Justice Department hosts Forfeiture.gov, which offers some optics on current seizure operations. This document, for example, outlines a case from May where 1.04430259 bitcoin was taken from a hardware wallet belonging to an individual in Kansas. Another 10 were taken from a Texas resident in April. But it is unclear whether it is a comprehensive list of all active cases.
"I don't believe there's any one place that has all the crypto that the U.S. Marshals are holding, let alone the different states that may have forfeited crypto. It's very much a hodgepodge," said Lakatos. "I don't even know if someone in the government wanted to get their arms around it, how they would go about doing it."
A Department of Justice told CNBC he's "pretty sure" there's no central database of cryptocurrency seizures.
But what does appear clear is that more of these crypto seizure cases are being trumpeted to the public, like in the case of the FBI's breach of a bitcoin wallet held by the Colonial Pipeline hackers earlier this spring.
"In my experience, folks that are in these positions in high levels of government, they may be there for a short period of time, and they want to get some wins under their belt," said Welle.
"This is the kind of thing that definitely captures the attention of journalists, cybersecurity experts, right, a lot of chatter around it."
A Few Tips To Guide You With Your First Cryptocurrency Investment – NDTV Profit
A cryptocurrency exchange is a platform that enables you to buy or sell all types of cryptocurrencies.
Cryptocurrency has become an increasingly popular investment asset for investors. Despite its volatility, investors appear keen to jump on the crypto bandwagon. The reason for this is its good returns. The most popular cryptocurrency is Bitcoin, followed by Ethereum, Dogecoin, and others. Investing in cryptocurrency can be a complex and tedious process, with several mathematical algorithms and technology to delve into. For beginners, the easiest way to join the trade is through crypto exchanges. This process is a convenient and simple way to begin the investment journey.
A cryptocurrency exchange is a platform that enables you to buy or sell all types of cryptocurrencies. Unlike the stock market, the cryptocurrency market operates 24/7 and is self-regulated. Here are a few tips to start crypto trading:
1) Picking A Crypto Exchange
The first step is to choose a suitable trading platform to open an account. In India, there are a number of platforms such as BuyUCoin, CoinSwitch Kuber, WazirX etc.
2) Uploading Documents And KYC
Like any regular bank account, cryptocurrency exchange accounts also require documents such as address proof, identity proof, PAN card etc. This will ensure your account is legitimate and protect you from any fraud. Along with your personal information, you will also have to provide payment options. The specified payment option will be used for all your trading activities related to withdrawals and deposits.
3) Trade Orders
Usually, you won't be able to begin trade soon after depositing money and uploading documents. The exchange takes some time to verify your credentials. It notifies users after the process is complete. Since the crypto market is open 24/7, you can trade any time you please. You can either store the cryptocurrency you have bought in a digital wallet or choose to withdraw it as money.
4) Begin With Small Investments
As the cryptocurrency market is highly volatile, it is wise if youbegin withsmall investments. Do adequate research. Increase your investment once you have familiarised yourself with the market.
5) Pick One Crypto
Initially, approach the market with caution and buy the coin you feel most sure about. Stick to your decision and monitor your progress before expanding your portfolio.
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A Few Tips To Guide You With Your First Cryptocurrency Investment - NDTV Profit
Why crypto community in India is bullish even as the Govt delays regulation – The Financial Express
Representative image
Even as the Government has delayed cryptocurrency regulation in the country and the RBI is gearing up to introduce Indias own digital currency to counter private virtual currencies, the crypto community is bullish on the future.
The delay in introduction of Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is being seen by the crypto community as a welcome sign. They believe the Government is finally taking cryptocurrency seriously and is not in a hurry to introduce harsh regulations.
In 2019, the SC Garg Committee had recommended the Government not to allow private cryptocurrencies in India.
These cryptocurrencies cannot serve the purpose of a currency. The private cryptocurrencies are inconsistent with the essential functions of money/currency. Hence, private crypto currencies cannot replace fiat currencies, it had said. This committee not only recommended a blanket ban on all cryptocurrencies but also suggested the Government to criminalize carrying on any activity connected with cryptocurrencies in India
However, since then, cryptocurrencies have continued to thrive in the country. According to various estimates, around 15 million Indians are said to have invested in the private crypto assets. In just one year from April 2020, crypto investments in the country grew from $923 million to nearly $6.6 billion by May 2021.
According to Nischal Shetty, CEO of crypto trading platform WazirX, delaying introduction of crypto bill in the Parliament shows the government is not in a hurry to make a decision.
Its a good sign and shows that our lawmakers are deliberating and understanding this technology instead of rushing into it. This is a really important bill that involves both finance and technology, and I dont think the government will pass a bill without considering stakeholders views. News like S&P adding more crypto indexes is a proof that crypto is headed towards mainstream adoption. Im optimistic that India is going to be a part of this innovation via regulatory clarity, Shetty said.
ALSO READ | Why Dogecoin is so popular in India and not the desi Matic (Polygon)?
Considering the rapidly growing size of crypto community in the country, it is becoming obvious that the Government is taking a cautious approach towards private virtual currencies.
Bitinning founder Kashif Raza also believes that the Government would not ban ban cryptocurrencies. If the Government wanted to act on the SC Garg Committee recommendations, it would have already done that. But this has not happened till now, Raza said.
Sharat Chandra, Blockchain Expert, IET Future Tech Panel, said shelving of crypto bill has not dampened the sentiment of crypto entrepreneurs and investors.
The delay in tabling the bill augurs that the government seems to have bought more time to shape the contours of the bill . The Union Finance Minister has reiterated multiple times that the government is open to allowing a window of experimentation to fuel innovation in crypto and fintech space, said Chandra.
Wait and Watch
Raza said the Government has adopted a wait and watch policy, which is similar to the stance adopted by all developed countries.
The Government is observing whats happening in the crypto space all across the world. All the developed countries of the world are keeping an eye on cryptocurrencies and are allowing the technology to grow, he said.
Raza is hopeful that the recent expansion of the Union Cabinet, in which tech-friendly ministers like Ashwini Vaishnav and Rajeev Chandrasekhar were inducted, would bring favorable policies for the crypto community in India.
Glimmer of hope
The Union Government shelved the much hyped Cryptocurrency Regulation Bill for discussion during the Monsoon Session of Parliament. In a written reply to a query in Lok Sabha in the Monsoon Session, the Government reiterated its 2018-19 position that it does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these crypto assets in financing illegitimate activities or as part of the payment system.
ALSO READ | Trading Bitcoin, Dogecoin, ETH or Matic? Check Income Tax, ITR Filing rules to apply on your income
However, providing a glimmer of hope to the crypto community, the Government said it will explore use of block chain technology proactively for ushering in digital economy.
More funds coming
Chandra believes the hopes of crypto community in the country is fueled further by the fact that Indian Venture Capitalists (VCs) have started to gradually warm up to them.
Few leading Venture Capitalists in India are scouting for innovative projects and startups in DeFi(Decentralized Finance) space. Crypto and DeFi, powered by distributed ledger technology , are the future of finance. With more than 65 billion USD worth of assets locked in DeFi lending, borrowing and staking projects, democratization of financial services has just begun. A new era of open finance built on public blockchains will usher in transparency , efficiency and accessibility. The euphoria and enthusiasm in Indian cryptoverse is fuelled by the fact that Indian VCs are gradually warming up to crypto projects, said Chandra.
No outright ban
Sandeep Nailwal, Co-Founder and COO of Polygon, believes that the Government will not ban cryptocurrencies in India. Rather it may introduce pragmatic regulations.
Weve noticed a lot of block chain-based teams in India that are focused on the technology rather than the trading of crypto assets. However, we did not see such initiatives getting any official attention. What I believe is that the government has shown an interest in learning more about space in order to develop appropriate laws. I dont believe the Indian government would outright prohibit cryptocurrency; rather, it will be pragmatic and find a way to accommodate it, Nailwal said.
Raza also believes that the instead of banning cryptocurrencies, the Government may bring strong regulations, which will always be better than a ban.
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Why crypto community in India is bullish even as the Govt delays regulation - The Financial Express
Infrastructure Bill Threatens Cryptocurrency Ecosystem: Why Is Crypto Being Targeted With More Tax Reporting Burdens Than Traditional Finance? -…
The Senate is poised to vote on an infrastructure bill containing tax-reporting revenue provisions that could have devastating effects on the business model of cryptocurrency products and services. The crypto community is rightly outraged over sweeping language that could harm not just cryptocurrency exchanges such as Coinbase (COIN), but the software developers and other small entrepreneurs that keep the cryptocurrency infrastructure or ecosystem going.
The provisions of the bill entitled the Infrastructure Investment and Jobs Act go far beyond merely requiring cryptocurrency brokers to follow similar tax reporting rules for brokers of other financial assets like stocks, as proponents claim.
Since 2011, traditional brokerage firms have been required to report capital gains and losses to the government and send 1099 tax forms to the individual customers. Yet a comparison of the tax reporting requirements for traditional brokers and the broad language that would govern crypto in this bill show the latter provisions are far more extensive and intrusive in both definition of broker and the information that must be reported.
First, there is a much broader definition of brokers in the infrastructure bill. In the legislation requiring tax reporting for traditional financial assets, which passed as part of the Trouble Asset Relief Program (TARP) bailout of 2008, broker is defined relatively narrowly as a firm that deals directly with a customer. In that legislation and other provisions of tax law known as the tax code, a broker is defined as a dealer, a barter exchange [which is defined elsewhere in the tax code as any organization of members providing property or services who jointly contract to trade or barter such property or services] and any other person who (for a consideration) regularly acts as a middleman with respect to property or services.
By contrast, the infrastructure bill provisions on tax reporting include in the definition of a broker (on page 2434 of the embedded PDF file of the bill) any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person. Thus, unlike the provisions of the tax code governing traditional financial assets, these rules could lump in as brokers of cryptocurrency or digital assets depending on the interpretation of those running the Treasury Department and Internal Revenue Service (IRS) a vast array of individuals who provide services but do not interact directly with cryptocurrency customers.
The broad, confusing language leaves open a door for almost any entity within the cryptocurrency ecosystem to be considered a brokerincluding software developers and cryptocurrency startupsthat arent custodying or controlling assets on behalf of their users, observes the liberal-leaning civil liberties group the Electronic Frontier Foundation.
Software developers and other technicians in the crypto world as well as in traditional financial services dont have the capability to do tax reporting because they often dont know the identities of the individual customers for whom they facilitate transactions. This is by design, so privacy and data security is protected, and sensitive data is kept mostly in the hands of the financial firms to which customers have given their information. But under these provisions, many ancillary crypto firms would be forced to set up new know your customer surveillance procedures. As noted by EFF, these provisions would mean that every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.
Other advocates for digital privacy and cryptocurrency investors and entrepreneurs, as well as senators of both parties, have made similar criticisms. Both conservative Senate Banking Committee Ranking Member Pat Toomey (R-PA) and liberal Sen. Ron Wyden (D-OR) have said the provisions need to be narrowed.
Under the current language, the provisions also could reach the individual entrepreneurs at the heart of the cryptocurrency industry: miners. As Paul H. Jossey principal attorney at Jossey PLLC and Adjunct Fellow for Cryptocurrencies and Crowdfunding at my organization, the Competitive Enterprise Institute, explains in an interview: Miners, as the name implies, perform an online version of gold prospecting using cryptography and computational power. With bitcoin and many other types of cryptocurrency, miners maintain the distributed ledger system called blockchain that ensures data integrity and prevents fraudulent transactions, and they are in turn rewarded with native cryptocurrency.
Though miners would likely fit the infrastructures bills current definition of effectuating transfers of digital assets on behalf of another person, they dont know the other persons identity. Thats an embedded feature of blockchain development that protects privacy and data security for cryptocurrency holders.
Also, many miners are the furthest thing away from a traditional finance brokerage firm. Jerry Brito, executive director of a crypto policy think tank, notes that a miner can be a kid in his dorm room. Jossey says he fears that these worrying provisions of the infrastructure bill could kill cryptos main benefits of apolitical and decentralized governance. If this happens, that would diminish cryptos many other benefits such as enabling wealth-building for ordinary Americans, hedging inflation, and moving money faster for struggling entrepreneurs and lower-income consumers.
Fixes being discussed on the Hill, according to those familiar with the legislative process, include specifying that a broker is limited to someone who interacts directly with a customer, and saying that he or she is only responsible for providing to the government information on the customer that he or she already has. The latter change would reduce the likelihood that crypto entrepreneurs would have to engage in privacy-threatening surveillance of cryptocurrency holders.
While the tax and regulatory frameworks governing cryptocurrency need to be updated, and I and others have suggested many constructive ideas to do this, in this case the solution is to simply make the tax reporting provisions for crypto no broader than they have been for more than a decade for traditional financial brokers.
One thing should be clear.Any bill aimed at boosting infrastructure should not contain provisions that could destroy, rather than help build, a vital part of Americas digital infrastructure.
John Berlau is senior fellow at theCompetitive Enterprise Instituteand author of the 2020 bookGeorge Washington, Entrepreneur: How Our Founding Fathers Private Business Pursuits Changed America and the World
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Infrastructure Bill Threatens Cryptocurrency Ecosystem: Why Is Crypto Being Targeted With More Tax Reporting Burdens Than Traditional Finance? -...
Cryptocurrency and Crypto Tokens: Whats the Difference? – Gadgets 360
Cryptocurrency is now a fairly common term. Most of us must have read about different kinds of cryptocurrencies and how they are traded. Some of us would have even invested in the lucrative but speculative digital asset class. While one must research the risks involved and gains expected before making such an investment, it's equally important to understand the technical terms. We sometimes inadvertently use cryptocurrencies and crypto tokens interchangeably. Though similar, these two have fundamental differences and it's important to not confuse them. Both are digital assets. But cryptocurrencies have their own blockchain whereas crypto tokens are built on an existing blockchain.
What is a cryptocurrency?
A cryptocurrency is a blockchain's 'native currency' like Bitcoin or Ether and is issued directly by the blockchain protocol on which it runs. Many times, cryptocurrencies are used to pay transaction fees or incentivise users to keep the cryptocurrency's network secure. Investors put their money into cryptocurrency as these coins typically serve as a medium of exchange to buy goods and services, or as a store of value to be exchanged for fiat currency like Indian Rupee or US Dollar at a later date in the hope of getting good returns or at least the same value as invested.Bitcoin price in India stood at Rs. 28.2 lakhs and Ethereum price in India stood at Rs. 1.84 lakh as of 9:30am IST on August 4.
Cryptocurrencies are decentralised, meaning they do not rely on a central issuing authority. They are built on a blockchain and have a distributed ledger for everyone to see the transactions. This allows enforcement of the rules in an automated and impartial manner. These coins use cryptography, an encryption technique, to secure the underlying structure and network system.
What is a crypto token?
Crypto tokens often share deep compatibility with cryptocurrencies, but they are a different digital asset class. For example, Ethereum is a blockchain and its native token is Ether (ETH). But there are several other tokens DAI, LINK, or COMP that also depend on the Ethereum platform. Like cryptocurrency, tokens can hold value and can be exchanged. But a token can also represent physical assets, or a utility or service. For example, some crypto tokens represent assets like real estate and art. The process of creating tokens and assigning them value is called tokenisation.
With the crypto industry growing at a rapid pace, these unique assets will continue to grow and people will keep assigning value to these tokens against the asset they will represent. A very simple description of a token would be that it's a smart contract'. Essentially rights management tools, these contracts can represent any existing digital or physical asset. Crypto tokens basically represent a set of rules and every token belongs to a blockchain address. The person who has the private key for that address can access the respective token. And this person is regarded as the owner or custodian of that token.
Conclusion
Often, we come across people using cryptocurrency to refer to both the native coins as well as the tokens. Given the difference between them, a more correct usage to refer to both these digital asset classes would be to call them crypto assets.
https://gadgets.ndtv.com/finance/ethereum-price-in-india-today-inr
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Cryptocurrency and Crypto Tokens: Whats the Difference? - Gadgets 360
Harassment of unvaccinated and invisible fortune that is cryptocurrency – ThePrint
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The selected cartoons appeared first in other publications, either in print or online, or on social media, and are credited appropriately.
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Harassment of unvaccinated and invisible fortune that is cryptocurrency - ThePrint