Indian Finance Minister Calls For Caution As Regulator Begins Investigating Crypto Exchanges
Authorities in India are going tough on crypto exchanges as many are under investigation by the Enforcement Directorate (ED).
Accordingly, the Indian Minister of Finance has called for caution from digital asset investors. Meanwhile investigation into the activities of crypto service providers is ongoing. Reports indicate that the ED has made several arrests and frozen the assets of some firms.
Finance Minister Warns Over Crypto Investment
Nirmala Sitharaman, the Finance Minister, is reported to have warned investors about the dangers of investing in crypto assets. According to her, cryptocurrency is not a substitute for government-issued fiat currency.
However, she noted that the government has already warned of the risks. Therefore, she believes educating the public on the dangers of losing their money in crypto would be welcome.
Furthermore, the finance minister also revealed that new regulations that would work to protect investors in the crypto space are on the way.
Meanwhile, the finance minister’s statement came at the heels of the ED probes of many crypto exchanges. In addition, the agency is investigating cases of money laundering involving digital asset service providers.
However, Vauld responded to the regulator’s allegation by revealing that it had complied with all requirements from the government. It further added that it received a summons in July requiring it to provide the necessary information and documents to the authorities, which it did.
Furthermore, the company stressed that the freeze order is on a customer’s assets whose account it deactivated after brief use. As a result, the crypto lender disagrees with the government’s order to freeze its assets after following all official requirements in the country.
India’s Crypto Boom
The world was never the same after the pandemic in 2020. The effect of the economic disruption necessitated by the lockdown on the global economy is telling. Several commodities and assets have lost significant value, prompting people to look for alternative venues to invest in.
As a result, digital assets have become the go-to investment product for most investors. What makes virtual tokens attractive is that most people in India see the crypto market as almost immune to the ravaging economic effects of the pandemic.
Moreover, from 6 million users in March 2020 to almost 90 million as of March 2022, the spike in users is unprecedented. This number may be higher as experts do not include others who have accessed foreign crypto platforms via VPN. The country now has an estimated 15–20 million crypto investors holding over $5.3 billion in digital assets.
India’s millennials are the biggest supporters of the crypto asset and serve as the springboard for the industry’s growth.
Several indigenous crypto firms like Wazirx and CoinDXC have led many foreign companies to enter the Indian market and invest in domestic exchanges. As a result, India currently occupies second place among nations witnessing a rapid adoption rate of digital currencies.
Meanwhile, the Indian crypto market has grown 641% from July 2020 to June 2021.
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