Regulation
India to Present Union Budget On July 23, Will Crypto Investors Get Tax Relief?
The newly elected Indian government under Prime Minister Narendra Modi will present the Union Budget later this month on July 23. India’s crypto industry is looking forward to this budget with high hopes expecting some tax reliefs along the way. Furthermore, the crypto industry is also looking for clear guidelines from the Indian government.
India Budget: Will Govt. Reduce Crypto Tax Burden?
For the upcoming union budget, the crypto industry has a few hopes such as the reduction in crypto taxes, allowing the off-setting of crypto losses against the gains in a given financial year, as well as treating capital gains in crypto at par with other asset classes. Lastly, the industry expects India to build a conducive environment for crypto firms, in order to compete with other global economies.
Back in 2022, the Indian government had imposed a hefty 30% tax flat on crypto gains. This was irrespective of one’s income tax slab. Additionally, the government imposes a 1% tax deducted at source (TDS) on every transfer of crypto assets.
Ashish Singhal, co-founder of cryptocurrency app CoinSwitch, stated that to make the most out of India’s Web3 opportunity, the Indian government must reconsider the cryptocurrency tax treatment in the upcoming budget. He said:
“The flat rate of 30 percent applicable on income from the transfer of VDAs needs to be re-examined to ensure parity with other tech-enabled sectors. Additionally, the threshold of Rs 10,000 or Rs 50,000 can also be looked at. Most crypto sellers (mainly individuals) are in the low-income bracket. Increasing the threshold will reduce the administrative burden on the tax department in processing refunds”.
A key advantage of investing in traditional assets like stocks, gold, and bonds is the ability to offset losses in one asset against gains in another within the same year and to carry forward unadjusted losses for future adjustments. In contrast, losses from one crypto asset cannot be offset against gains from another, nor can they be carried forward. As a result, the industry is seeking a major revision to this rule.
Also read: CoinDCX Acquires BitOasis To Foray Into MENA Region
Furthermore, during the pre-budget consultations, the Bharat Web3 Association requested the government in order to reduce the TDS from 1 percent to 0.01 percent.
“The Indian VDA market has seen a sharp decline in business over the past two years since the 1 percent TDS and capital gains tax were implemented. The 1 percent TDS has significantly impacted our business. We expect the upcoming budget to address our grievances and reduce the TDS and capital gains taxes on VDA transactions to reasonable levels, allowing us a level playing field to function and prosper,” said Shivam Thakral, chief executive officer, BuyUcoin, a cryptocurrency exchange.
Learning Lessons from US Regulations
The US SEC’s approach to regulation through enforcement has faced a strong backlash from the crypto industry players in recent years. Such regulatory measures have forced several token innovators and crypto developers to set up their base outside the US.
One of the primary criticisms of US crypto regulation is the lack of clear, consistent guidelines. This uncertainty has placed startups and established companies in a challenging position, unsure of compliance requirements and wary of abrupt legal repercussions.
As India advances in shaping its crypto regulatory framework, it can draw lessons from the US to sidestep potential pitfalls and cultivate a more favorable environment for digital assets. India should aim for a balanced approach, akin to the Goldilocks zone, promoting innovation while safeguarding investors through regulations that are neither overly stringent nor lax.
Emphasizing the practical utility of blockchain technology beyond speculation can spur the creation of impactful solutions in sectors such as finance, supply chain management, and public administration.
Also Read: Voice of Web3 by Coingape : Showcasing India’s Cryptocurrency Potential
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.
Regulation
Polymarket Faces French Ban After Massive Bets On US Election Results
Polymarket, a crypto-based prediction market, is likely to be prohibited by France’s gambling regulator, the ANJ, after a huge amount of bets were placed on the 2024 U.S. presidential election. Since the global audience engaged in prediction platforms, Polymarket experienced a record jump, with $450 million expected to be distributed to users following the victory of Donald Trump.
This increase of betting volume and large stakes has become a matter of concern for the French regulator because the platform offers unlicensed gambling services.
$450 Million in Payouts Expected After U.S. Election Bets
Prediction markets, which are expected to increase their payout to election bettors to around $450m following Donald Trump’s projected win, are attracting increasing attention.
Although conventional polls pointed to a closer contest, prediction markets such as Polymarket and Kalshi recorded a steep rise in Trump’s chances in the last few days, indicating a strong divergence with poll-based expectations.
Among the active users of Polymarket, a French trader called “Theo” made a $26 million bet on Trump’s win and won $49 million. This big bet made Polymarket popular, as the French authorities paid attention to the platform and its popularity among French residents, which led to concerns about the compliance of the platform with French gambling legislation.
France’s ANJ Considers Blocking Access to Polymarket
The ANJ has claimed that Polymarket is involved in gambling which is only allowed in France by licensed operators. According to local media, the regulator has the power to ban access to unlicensed gambling sites and is expected to restrict access to Polymarket soon.
An ANJ insider said: “Polymarket is just betting on something that is completely uncertain, which is exactly what gambling is.”
If put in place, the ban would prevent the usage of the application in France, despite the fact that users can still try to avoid the restriction by connecting to VPN. The ANJ could also try to influence media outlets and directories to stop advertising or linking to Polymarket and, thus, limit its audiences even more.
Regulatory Concerns Over Market Manipulation
The high level of activity on Polymarket has led to speculations that the platform may be used for market manipulation. Two blockchain analysis firms, Chaos Labs and Inca Digital, recently revealed that there was potential wash trading within Polymarket’s U.S. presidential betting market where the same assets are bought and sold to simply create a fake market. This type of trading is rather manipulative and can lead to the distortion of signals on the market and mislead other participants.
The US Commodity Futures Trading Commission also has concerns about prediction markets and put forward a rule in May aiming at stricter regulation of such markets due to the potential for manipulation.
Although no final decision has been reached, regulatory actions could impact Polymarket’s ability to operate freely in other markets, including the U.S.
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.
Regulation
FTX Co Founder Gary Wang Appeals For No Jail Time, Here’s Why
FTX co-founder Gary Wang has requested a federal judge not to send him to prison. He noted that he is testifying against the former business partner, Sam Bankman-Fried, someone he has known for a long time in a fraud case.
The lawyer for Wang submitted a sentencing memo in Manhattan federal court wherein he claimed that his client should not be incarcerated as he provided assistance to the prosecutors as well as his role in the scheme was comparatively less.
Wang, who pleaded guilty to fraud and conspiracy when FTX went bankrupt in 2022, is to receive his sentencing on the 20th of November.
FTX Co-Founder Gary Wang Appeals for No Jail Time
The defense counsel for FTX co-founder Gary Wang highlighted his client’s early cooperation with the federal prosecutors as one of the key reasons why the court should consider him for mercy. According to Graff, Wang was one of the first FTX executives to meet with the authorities and share information on the FTX and Alameda Research. Wang gave a testimony in the trial that led to the recent conviction of Bankman-Fried who was sentenced to 25 years in prison.
Speaking at the trial, Wang described how he was ordered to change the code of FTX in order to enable Alameda Research to use the assets of the company’s clients, which is one of the key points of Bankman-Fried’s fraud.
FTX co-founder’s lawyer noted that his involvement in the fraud was less than some of the other former executives, including Caroline Ellison, former CEO of Alameda Research, and Nishad Singh, FTX’s former head of engineering. Wang, his lawyer said, did not start or operate the scheme and was not personally involved in the provision of false information to the investors.
“Gary was not involved in the scheme at its inception, was never provided with details of the scheme, and, in contrast to Bankman-Fried, Ellison and Singh, never engaged in any affirmative action of deception,” Graff wrote.
Sentencing Comparisons to Other Executives
Wang’s attorney argued that a prison sentence would create an “unwarranted sentencing disparity” with Nishad Singh, who avoided jail time after pleading guilty and cooperating with the government. Singh, who faced potential decades-long sentences, was ultimately sentenced to time served and three years of supervised release.
Ellison, another major cooperator, received a two-year prison sentence. FTX co-founder Gary Wang contended that Wang’s level of involvement was even lower than Singh’s, supporting a non-custodial sentence for Wang as well.
Graff also noted Wang’s personal circumstances, stating that Wang is expecting the birth of his first child shortly after his sentencing date. Wang’s attorney suggested that allowing him to remain with his family would align with the court’s treatment of other cooperators in the case.
“Gary wants nothing more than to be a good husband and father and to continue his work to facilitate FTX victims’ recovery,” Graff wrote.
Separately, the U.S. government is working to reclaim approximately $13.25 million in political donations made by FTX executives, including Bankman-Fried and Singh. Judge Lewis Kaplan however granted the government additional time to negotiate the return of these funds, extending discussions with the PACs until January 15, 2025.
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.
Regulation
US SEC Files Motion for Judgment Against Kraken, Challenges Key Defenses
The U.S. Securities and Exchange Commission (SEC) has filed a motion seeking judgment in its case against cryptocurrency exchange Kraken, focusing on defenses such as “fair notice” and the “major questions doctrine.”
This move, led by SEC Chairman Gary Gensler’s team, aims to limit further discovery into the agency’s regulatory policies, particularly those affecting the crypto sector. The timing of the filing has drawn attention, as some in the industry view it as a strategic attempt to shield the SEC’s methods from closer examination.
US SEC Files Motion for Judgment Against Kraken
The SEC’s motion seeks to dismiss defenses put forward by Kraken that include the fair notice defense and the major questions doctrine. The fair notice defense argues that Kraken did not receive adequate regulatory guidance regarding its crypto-related activities.
Meanwhile, the major questions doctrine suggests that regulatory agencies, such as the SEC, should not make major policy decisions without clear direction from Congress.
Subsequently, the US SEC’s motion appears intended to prevent further discovery into its policies, which Kraken and other crypto advocates have criticized as inconsistent and unclear. A similar motion was filed in Ripple case, where the US SEC failed to secure a judgment. Michael O’Connor, an attorney representing Kraken expects a similar outcome in the Kraken case, though Kraken has indicated that it has additional defenses should this motion proceed.
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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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