Hiding Crypto Assets? 1.5 Yrs Prison, Rs 20 Crore Penalty Under Proposed New Bill

As authorities are planning to classify cryptocurrencies as financial assets, the Indian government is considering appointing its capital markets regulator, according to people known with the development.

Introducing Deadline For Cryptocurrency Holders

Most probably, Prime Minister Narendra Modi’s government will give crypto holders a deadline to declare their assets.

So that they can meet any new rules, according to the sources asking not to be identified as the discussions are private.

Bill On Cryptocurrencies

Soon, they are planning to introduce legislation in the ongoing parliament session. 

This bill is expected to use the term ‘cryptoassets’ rather than ‘cryptocurrencies,’.

It won’t refer to the central bank’s plan to create its own digital currency, one of the sources said. 

Introducing Penalty For Violators

The proposals also mention that the  violators could be fined as much as 200 million rupees ($2.7 million) or imprisoned for 1.5 years, as per the information given by sources.

Beside this, the government also plans to prescribe a minimum threshold for investing in crypto assets.

This would safeguard small investors, as per the report.   

So far, there is no comment from a spokesman for the finance ministry. 

Recognize Bitcoin As Currency

Last week, Finance Minister Nirmala Sitharaman said the government has reworked an earlier bill.

Further adding that it had proposed banning all private cryptocurrencies — to factor in new developments. 

According to her, there was no proposal to recognize Bitcoin as a currency in the country earlier. 

According to an October report from Chainalysis, a crypto-analysis firm, the crypto market in India has grown 641% in the year through June 2021.

So now the government is considering taxing gains from digital currencies. 

Apart from that there have been calls to impose stricter rules for transactions in virtual coins due to the unregulated nature of the business.

Prior to this, Modi held a review meeting on digital currency at the start of this month.

In this meeting, they discussed that unregulated crypto markets can’t be allowed to become avenues for money laundering and terror financing.