India investigates crypto exchanges

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So often is the case that the countries in Asia are quicker to crackdown on online entities than those in the west. Many governments across the region are more concerned with controlling their populations rather than bettering their lives through development and innovation. India is the latest to join the ranks of nations coming down hard on crypto.

Income tax officials in India have launched a countrywide investigation into illegal Bitcoin exchanges a week after the central bank issued its third warning about the risks of crypto currencies. According to a Bloomberg report surveys are being conducted by the Income Tax Department on virtual currency exchanges across the country, including cities of Mumbai, Bengaluru, Pune, Hyderabad, Gurgaon and Delhi.

The action was initiated under sectin 133A of the Indian Income Tax Act. A spokesperson for the department said:

“We are looking at collecting information about (the) modus operandi of bitcoin exchanges, investors, their source of investment and possibility of collecting tax,”

Soaring prices in the past month have governments and regulators worried. Bitcoin has almost tripled in value from this time last month where it traded at around $6,500. Indian investor interest has been ignited and a number of crypto currency exchanges have seen their volumes doubled.

The Reserve Bank of India issued another cautionary note reiterating its previous warnings.

“In the wake of a significant spurt in the valuation of many virtual currencies and rapid growth in initial coin offerings, RBI reiterates the concerns conveyed in the earlier press releases,”

The Press Trust of India reported that investigation is for gathering evidence to establish the identity of investors and traders, their transactions and related bank accounts used.

Economic Affairs Secretary Subhash Chandra Garg has been appointed to lead a panel to determine India’s stance on crypto currencies. Other members of the panel include the Securities and Exchange Board of India Chairman and Reserve Bank of India’s Deputy Governor.

CEO of Coinome, a leading cryptocurrency trading exchange in the country, said:

“No cash or cheque is accepted, all transactions are routed via online bank transfer to ensure that there is a money trail. Moreover, we also follow the electronic know-your-customer procedure and also check the Aadhaar number to ensure that fraudulent transactions are avoided.”  in response to government concerns over money laundering.

At the time of writing crypto currencies were still being legally traded across India.

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