India to [Finally] Draft Cryptocurrency Regulations in December: Report

India cryptocurrency

After years of ambiguity, the Indian government might, at last, reveal a regulatory draft for the cryptocurrency sector in the country before the turn of the year.

A panel tasked by India’s finance ministry to regulatory norms and guidelines for domestic cryptocurrency trading and the blockchain industry is set lay bare its draft next month, according to a Quartz report on Tuesday,

The notable development came to light in a counter-affidavit filed by India’ ruling government in a Supreme Court case which currently sees India’s domestic cryptocurrency exchange industry challenging the banking ban enforced by the central bank earlier this year.

An excerpt from the government’s counter-affidavit reads:

[S]erious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.

The affidavit goes on to reveal that the draft bill and report will be forwarded to members of the finance ministry’s inter-ministerial committee. Subsequently, the committee will hold a meeting on the drafts which will be made available to its members sometime in December.

First established in early 2017, the country’s finance ministry formed an inter-governmental committee that was tasked to examine global regulatory and legal frameworks for cryptocurrencies. The committee, which includes India’s taxation, budget and economic affairs ministries as well as central bank representatives, has the mandate of suggesting measures to propose a regulatory framework for cryptocurrencies – both in usage and trading – in India.

Chaired by Subash Chandra Garg, the head of the committee and secretary of the Department of Economic Affairs, the panel’s approach to regulation will be revealed at a time when the government is considering a ban on the use of private cryptocurrencies In India.

In a televised interview in June, Garg hinted that the committee had “moved quite a lot” in drafting the regulations despite repeatedly missing deadlines on revealing the drafts.

An ongoing ban enforced by the central bank barring banks from providing services to cryptocurrency exchanges has largely chocked the industry in India. It was no longer “reasonable” to continue operations as a crypto exchange, major trading platform Zebpay said in September while ending its operations before headling to friendlier shores in Malta.

Featured image from Shutterstock.

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Indian Muslim Cryptocurrency Ponzi Scheme Busted in Bangalore

Like cryptocurrency Ponzi schemes in India were not common enough, now Muslim cryptocurrency traders must be on the look out as well. Recently, the Enforcement Directorate (ED) discovered that a Bangalore-based company, Ambidant Marketing Pvt Ltd, involved in Islamic banking and halal investment, was allegedly running a Ponzi scheme.

In a statement to news portal, India Today, the ED said, “During the investigation, it came to the fore that the scheme run by the company is surely a potential Ponzi scheme. In view of the above, ED has written to the RBI (Reserve Bank of India) to have another look into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment.”

The ED chanced upon the company’s activities soon after it came under the body’s radar, among 4000 companies placed under similar investigation. Unlike other companies, the investors were unaware of the development.

According to several news reports, the company was run by father-son duo, Syed Fareed and Syed Afaq Ahmed who used promises of Halal investments as well as misused Ulemas to project themselves as Shariah-compliant investment company for Muslim investors. Further reports suggested that the using Halal businesses as cover, the company tried to lure investors by promising them returns of as much as 50 percent per lakh Rupees (approximately $275).

The company, without informing the investors, invest the takings in cryptocurrencies where it made a fortune, enabling it to pay the promised returns for a little time, until the scheme grew bigger. As more investors joined the scheme, the returns dropped by 25 percent, then to 11 percent before finally paying out 9 percent in January 2018, which was its last payout. In the meantime, investors had nearly made nearly double their initial investment amount ranging from Rs 50,000 to Rs 1 crore, news portal, CCN reported.

Although bitcoin is no longer frowned upon among certain sections of the Muslim community, this news will definitely make people think twice before investing in fraudulent, get-rich-quick schemes.

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Exclusive: Blockchain In Indian Insurance Sector Will Help Prove Authenticity of Insurance Claim Says Accrivis Network CEO

Last week, we had reported on Policy Bazaar tying up with Accrivis Network, which is a data integration platform provider, to integrate blockchain to ensure ‘customer centricity through data security and application integration’.

Like most, we were cynical about how much progress yet another blockchain project had made and so we reached out to the Chief Executive Officer (CEO) of Accrivis Network, Jignesh Vasani, and Chief Technical Officer (CTO) Parag Someshwar to get some clarity on the project. First things first, the Policy Bazaar and Accrivis Network blockchain went live almost 3-4 weeks back and they have carried out their first few transactions. Vasani described it as, “It is one of the first blockchain transacton which is in real time and involves multiple party.”

We asked Accrivis, given that some aspects of blockchain require cryptocurrencies to run it, how they were navigating around that particular necessity. He said, “Let me clear the myth that blockchain is not equal to cryptocurrencies. Accrives is trying to introduce a blockchain network on which different companies can form multiple blockchains in a bid to increase transparency across the spectrum.”

He added that unlike present times, when databases belonging to different parties (companies or individuals) are not updated regularly and in real time, blockchain or distributed ledger technology will have instant updates in real time. Not only, will transaction payouts be faster and verifiable for customers, it will also help insurance companies to verify if a claim for insurance is legitimate or fraudulent.

Parag Someshwar chimed in by saying, “We are saying that there will be multiple blockchain networks but it can be controlled by one single node. Interactions between parties, transaction payouts can be executed with the help of smart contracts.”

However, currently, what those pre-existing conditions will be included to form a smart contract, is unclear. Vasani added that there is a lot of reluctance and hesitance from people when they hear blockchain but there has been steady progress. He said, “We are looking at forming a permissioned blockchain- where certain members (who we know) will be able to update the conditions of the smart contract while the blockchain in itself will be immutable and transparent.”

Asked which other industries the company is working with, the duo said, Accrives Network is in talks with sectors such as logistics, banks, and healthcare. While logistics and banks are more commonplace, healthcare came as a surprise. Someshwar said, “Healthcare industry will strive to use blockchain in areas such as patient data management, to increase transparency in laboratories, lab data, caregivers, reliable patient care, among others.”

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