Regulation
India Crypto Regulation Depends On DEA Release In September
India is gearing up for a significant move in its crypto regulation effort as the Department of Economic Affairs (DEA) prepares to release a crucial consultation paper between September and October 2024. This document is expected to serve as a cornerstone for shaping the country’s future approach to digital currencies. Some sources have revealed the government’s intent to actively engage stakeholders and refine its regulatory stance.
India Seeks Public Input For Crypto Regulation
The upcoming paper will seek feedback from various stakeholders. This reflecting the government’s commitment to creating a strong framework for crypto regulation. Moreover, the initiative aligns with the broader global effort, particularly within the G20, to establish a unified approach to regulating these assets.
In October 2023, Finance Minister Nirmala Sitharaman highlighted the G20’s consensus on the need for coordinated regulation across countries. She emphasized that while global cooperation is essential, each country must also tailor its legislative measures to address local challenges.
“Given the understanding that globally now all of us are on the same page about how regulations can happen, countries and their specific legislative arrangements will also have to be worked out,” Sitharaman stated. Her remarks underscore the dual approach India is taking. It includes working in align with international bodies while also addressing domestic regulatory needs.
The DEA’s paper will be instrumental in gathering insights and opinions on how to effectively regulate crypto assets in India, according to a CNBC report. Economic Affairs Secretary Ajay Seth, in an interview in September 2023, noted that the government would carefully consider the recommendations before finalizing its policy direction.
Seth also emphasized the importance of addressing the unique risks that cryptocurrencies pose to emerging economies like India. Seth’s comments come against the backdrop of India’s evolving stance on crypto regulation.
In 2023, during its G20 presidency, India played a pivotal role in endorsing guidelines from the International Monetary Fund (IMF) and the Financial Stability Board (FSB), which advise against blanket bans on crypto activities. These guidelines have influenced India’s current cryptocurrency regulation.
Current Regulation & Divergent Views Of Authorities
The country currently focuses on anti-money laundering (AML) and counter-terror financing (CTF) measures, extended to crypto assets and intermediaries since March 2023. Furthermore, the upcoming consultation paper will address key policy questions, including the scope and extent of regulation in the crypto space.
The latest update comes at a time when Indian authorities are grappling with differing views on how to handle private virtual asset trading. The Securities and Exchange Board of India (SEBI) is reportedly more open to allowing such activities. Meanwhile, the Reserve Bank of India (RBI) remains cautious, citing concerns about potential macroeconomic risks.
This internal debate is not new. India’s approach to cryptocurrencies has seen several shifts since the Supreme Court’s 2020 decision to overturn the RBI’s 2018 ban on crypto-related financial services. A bill proposing a ban on private cryptocurrencies was drafted in 2021 but was never introduced, signaling the government’s cautious stance.
However, recent developments suggest a move towards a more nuanced regulatory framework. In July 2024, the RBI and SEBI joined forces with other government bodies to work on a comprehensive crypto policy for India. Furthermore, netizens expect the DEA’s upcoming consultation paper to reflect the G20-endorsed IMF-FSB framework. This marks a significant step towards a balanced and inclusive approach to crypto regulation.
Also, it’s important to note that the latest decision comes amid a critical juncture as the largest Indian crypto exchange, WazirX, faced a hack recently. On July 18, WazirX faced a $230 million security breach. Currently, investigations are underway but WazirX received a “clean chit” via a recent forensic report.
Kritika Mehta
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In a recent development, the US Securities and Exchange Commission (SEC) announced that Gary Gensler will step down from his position next year. This follows calls for Gensler to resign since Donald Trump won the US presidential elections.
Gary Gensler To Step Down As US SEC Chair
The US SEC announced in a press release that Gary Gensler will depart the Agency on January 20, 2025. The US SEC Chair also confirmed this development in an X post. Interestingly, this comes on the same day that Donald Trump will be inaugurated as the 47th president of the United States.
Following the announcement, Gensler also used the opportunity to reflect on his time at the Commission. He remarked that it has been an “honor of a lifetime” to serve alongside those at the SEC. He also thanked President Biden for the opportunity to serve in the position. Gensler has been the US SEC Chair since April 2021. During his time, he has spearheaded several litigations against the crypto industry.
This includes the long-running legal battle with Ripple, which Gensler took over from his predecessor Jay Clayton, which bordered on whether XRP was a security. Up till now, the Agency continues to reiterate this ‘digital asset securities’ claim.
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BitClave investors have started receiving $4.6 million in repayments from the U.S. Securities and Exchange Commission (SEC), following a settlement reached in 2020. The SEC announced on Nov. 20 that payments from the BitClave Fair Fund had been disbursed to eligible investors harmed during the company’s 2017 initial coin offering (ICO).
Pro-XRP lawyer and online commentator “MetaLawMan” criticized the SEC’s stance on digital assets, stating on social media, “Here we go again with ‘digital asset securities.’ Unbelievable.” The lawyer’s statement reflects ongoing industry frustrations over the SEC’s regulatory approach to cryptocurrencies.
BitClave Investors Get $4.6M Back in US SEC Settlement
The US SEC assured the public that $4.6 million was returned to investors who filed the claims and were eligible for the refunds. These funds were agreed upon in 2020 after the SEC accused BitClave of conducting an unregistered ICO.
The company’s initial coin offering (ICO) in 2017 brought in $25.5 million in only 32 seconds and distributed its Consumer Activity Token (CAT) to thousands of buyers. The SEC therefore claimed that the ICO was an unregistered securities transaction because potential investors were induced to invest in the CAT token with an expectation of appreciation of its value.
Under the settlement, BitClave will have to refund the money it raised and also pay $4 million in fines and interest. In between these settlements, John Deaton has accused the regulator of using laws that were set in 1933.
The Fair Fund was therefore created to ensure that the funds are returned to the affected investors. The claims submission period closed in August 2023, and the eligible investors received the information on the claims in March 2024. The Securities and Exchange Commission posted on its social media accounts that the payment has been made, and “the checks are in the mail.”
BitClave Settlement Included Penalties and Token Destruction
In the settlement, BitClave did not accept or reject the accusations made by the SEC but agreed to cough up $29 million. This total consisted of the $25.5 million that was generated in the ICO and the additional $4 million in fines.
Concurrently, the company also committed to burning 1 billion of the catalyst tokens that have not been distributed and to ask exchanges to delist the token.
The Securities and Exchange Commission therefore pointed out that by February 2023, BitClave had only remitted $12m to the Fair Fund, thus leaving questions on the balance of $7.4m. Neither the SEC nor the fund administrator gave further details on the matter, and it is still uncertain as to how the outstanding payment will be collected.
US SEC Maintains Strict Regulatory Stance on Crypto
The US SEC has continued to enforce regulations on crypto companies under the Biden administration, with over 100 enforcement actions taken against the industry. BitClave’s settlement, subsequently, is one of many cases where the regulator has targeted unregistered ICOs and other alleged securities violations.
BitClave’s case, handled under former SEC Chairman Jay Clayton, emphasized the agency’s view that many digital assets fall under securities laws. The CAT white paper described potential value increases, which the regulator argued encouraged speculative investment in an unregistered security.
As the US SEC faces criticism, President-elect Donald Trump has expressed plans to reshape crypto oversight. Trump has promised to remove current SEC Chair Gary Gensler and is reportedly considering creating a new White House position dedicated to cryptocurrency policy.
Kelvin Munene Murithi
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The United States Securities and Exchange Commission (US SEC) has further delayed its decision on Franklin Templeton’s Bitcoin and Ethereum index ETF. From the filing made on November 20, 2024, it has been agreed that the decision on the proposal will be made on January 6, 2025 to afford the regulating authority ample time to consider the proposal.
US SEC Extends Review Period for Franklin Templeton Crypto Index ETF
According to the US SEC filing of November 20, 2024, the commission deferred its decision on the Bitcoin and Ethereum index ETF by Franklin Templeton. Therefore, the regulatory body is seeking to extend the review period to January 6, 2025. The extension will help to have more time to consider the application which was filed on September 19, 2024.
The proposal was first published in the Federal Register on October 8, to kick start a thirty-five (35) days review period. As a result, the review was to end on November 22, 2024. Consequently, the review was to expire on November 22, 2024. However, the SEC’s decision to delay indicates a thorough approach to reviewing the fund’s compliance with crypto regulations.
Meanwhile, no public comments on the proposed rule change have been submitted, leaving the US SEC to focus on internal assessments. This delay concurs with the commission’s conservative approach to the products that are connected with cryptocurrencies. The extra time will allow more detailed research of fund’s organization and market risks.
Franklin Templeton Expands Push Into Cryptocurrency ETFs
Franklin Templeton is broadening its efforts in the cryptocurrency space with its proposed Bitcoin and Ethereum index ETF. The asset manager, which oversees $1.5 trillion in assets, has previously launched a spot Bitcoin ETF and a spot Ethereum ETF.
If approved, the latest ETF would add to Franklin Templeton’s portfolio of crypto-focused investment products, further diversifying options for institutional.
In addition, Franklin Templeton has taken a major step in its tokenization efforts, announcing the expansion of its Benji tokenization platform to the Ethereum network. This marks the fifth blockchain integration for the platform this year, following launches on Aptos, Avalanche, Arbitrum, and Coinbase’s Base.
Despite the US SEC overall crypto ETF delays, other market players are moving further with their strategies . Last week, Bitwise submitted a registration statement to transform the Bitwise 10 Crypto Index Fund which now manages $1.3 billion into an ETP. It investments in Bitcoin represent 75% of the fund and Ethereum is 16% of the fund; these two assets sum up to 91%.
Moreover, the filing comes when diversified crypto index funds seem to be gaining popularity among investors. Bitwise’s move will make investing in cryptocurrencies more accessible for retail audiences. When approved, this ETP will also set a paradigm for the expansion of multi-asset crypto based product offerings.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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