As cryptocurrencies, including Bitcoin, are seeing a free falling after the sudden collapse of crypto exchange FTX Trading, Republic Media Network on Sunday spoke to market experts on what this trend means to crypto investors in India. They also suggested steps that government could take to prevent the FTX-like fiasco in the country.
Sharat Chandra, blockchain and emerging tech evangelist, said that the FTX blowup happened due to a complete lack of transparency and disclosure on part of crypto entities.
“Since India will be taking over the G20 presidency and Finance Minister said that crypto regulations are a priority. I think we have the opportunity to shape global crypto regulations. The crypto debacles are a case in point of why we need regulations. Normal advisories won’t work we need to move ahead. India should definitely take a lead and be a Vishwa guru,” Chandra said.
‘Global coordination needed to frame crypto regulations,’ says tech evangelist
Moreover, he opined that global coordination and consensus are needed to frame crypto regulations. “No one nation can frame crypto regulations, there has to be global coordination and consensus. By the time there is a global consensus, we need to enforce existing money laundering laws and make these entities accountable.”
Advocate Prashant Mali, a Cyber and Privacy Law Expert, laws are not clear in regard to cryptocurrencies. “I feel the law has not been clear. The half-hearted statements come from ministers saying that innovation is allowed but you can’t deal in cryptocurrency when the law clearly says this Indian currency is not transferrable. When you buy crypto in an Indian currency, legal hassles will come. On one side you say this and another side you encourage innovation in cryptocurrency. One person is saying two tones. If the law part gets clear then only I think Indian cryptocurrency holders should invest in it.”
People investing hard-earned money are at risk: Privacy law expert
He added, “First of all, the bigger cryptocurrency holders are not at risk, they are at risk due to market fluctuations but the problem is for people who invested their hard-earned money. Because there is lawlessness, they don’t have any legal recourse. You cannot go to the police or regulators because there are no regulators.”
Mali also stated that some crypto exchanges might also be involved in felonious activities. “If a detailed audit is done of crypto exchanges in our country, you will find different frauds, different ways crypto exchanges are used for money laundering. These exchanges are even used as payment gateways, for parking money and hawala transactions…Some of the (Indian) crypto exchanges can also go the way, FTX has gone,” he said.
‘Invest money in couple of exchanges,’ suggests crypto investor. Chandni Kanoria, an investor and crypto expert, suggested people invest money in a couple of exchanges. She also said that government can regularise exchanges in the country.
“What happens is where else will you go, if you do not go to an exchange to buy or sell? You have no option but to trust an exchange. What happened at FTX was really bad and was unexpected for a reputed exchange. What I can suggest is that people can deposit their money in a couple of exchanges. What happened at FTX is also a sign for Indian government to really get things going. Apart from having crypto taxes, they haven’t done much in terms of regulations. If the Indian government can regularise exchanges in the country that would be a big step according to me,” she added.