New rules for the cryptocurrency market from India and the UK highlight the issue that regulations “reduce risks”. The UK, in particular, is gaining weight after several high-profile bankruptcies that have rocked the crypto space, including the collapse of FTX.
Government of India to impose penalties for unpaid cryptocurrency taxes
India has introduced new crypto tax penalties, including non-payment of the crypto tax (TDS) withheld at source. In the latter case, crypto income is taxed at 30%, while TDS remains at 1%.
Indian Finance Minister Nirmala Sitharaman presented the Union Budget 2023 in parliament on Wednesday, a day after she presented this year’s Economic Survey, which highlighted the need for a “common approach to regulating the crypto ecosystem.” To the disappointment of the Indian crypto community, he made no mention of crypto during his Budget speech. After his speech, many Indian crypto advocates took to Twitter to voice their opinions. In particular, Neeraj Khandelwal, co-founder of domestic exchange Coindcx, mentioned that this move could be disadvantageous for the country.
Sathvik Vishwanath, CEO of Indian crypto exchange Unocoin, wrote: “There was no mention of crypto or Blockchain in the Budget Session this time. It’s been a year since the 1% TDS announcement and we all thought it would impact the industry. We need refreshing changes now.”
Rajagopal Menon, vice president of crypto exchange Wazirx, said, “The Union of India Budget 2023 has made no changes to the current crypto taxes, leaving Indian crypto companies in the lurch. There is ongoing uncertainty due to high taxes and the lack of a robust regulatory framework that hinders progress in the industry.”
Government of India introduces crypto tax penalties
While the finance minister did not mention crypto in his Budget speech, the Finance Act reportedly includes an amendment to the Income Tax Act that applies to crypto TDS. Crypto tax firm Koinx stated on Twitter that the penalty for not deducting or paying crypto TDS includes an amount equal to the outstanding TDS to be applied by a partner commissioner, with 15% annual interest for late payments. According to India Today, failing to pay TDS on crypto transactions could sentence someone to up to seven years in prison.
UK announces plans to introduce ‘strict’ crypto rules
Elsewhere, the British Government has announced its plans to “strictly regulate” various crypto activities as it seeks to retain its customers and grow its economy. Over the next three months, British authorities will accept public feedback on new regulatory proposals designed to govern cryptocurrencies like traditional finance.
The executive power in London has announced new rules for the crypto market that will be consistent with the UK’s traditional financial sector regulations. Public opinion is currently awaited for the regulations. The following document provides an overview of future consultation work. One notable item shows that stablecoins may also be subject to strict regulations. Currently, the largest companies and stablecoins operating in this space are as follows:
- Tether (USDT)
- USD Coin (USDC)
- Binance USD (BUSD)
- TrueUSD (TUSD)
- TerraUSD (USDTC)
- Dai (DAI)
- Frax (FRAX)
- Ampleforth (AMPL)
- USDD (USDD) – Tron Blockchain
- USDN (USDN) – Near Protocol
The British government also insisted that the regulatory approach “reduces the most significant risks while taking advantage of crypto technologies”. Officials also highlighted the positive aspects of the crypto market such as expanding, generating earnings and job creation. Treasury Secretary of Economy Andrew Griffith said:
We remain true to our commitment to growing the economy and enabling technological change and innovation – this includes cryptocurrency technology. But we must also protect consumers who adopt this new technology.
Cryptocurrency exchanges and credit platforms play a leading role in regulating
The draft rules aim to ensure that crypto exchanges “have fair and sound standards.” They will be responsible for “defining detailed content requirements for acceptance and disclosure documents,” in an announcement Wednesday. Officials also stated that they want to tighten rules for brokers that facilitate and store crypto transactions. They believe this will help establish a “world first regulation” for the crypto credit system.
The arrangement came after several high-profile bankruptcies, including the collapse of FTX. The British government has previously said it plans to adopt regulations that would prevent market abuses. cryptocoin.com As we have mentioned, one of the strictest practices recently came from Hong Kong.
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