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Supreme court of China rules out crypto transactions as illegal

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On Thursday, China’s supreme court declared cryptocurrency transactions to be unlawful, threatening violators with steep penalties and up to ten years in jail.

While top-level Chinese government authorities had previously declared crypto illegal in 2021, the measure now makes it technically illegal, allowing the government to pursue dealers in court.

In September of last year, following a severe energy deficit, the nation imposed restrictions on crypto mining and commerce. Several businesses were forced to relocate to Singapore or shut down entirely due to the migration.

China had previously been the world’s largest crypto miner. Following a similar restriction in Kazakhstan, markets now perceive Russia as a major, up-and-coming player in crypto mining.

What does China’s new rules mean for crypto investors?

For major transactions, the court’s new order now specifies jail terms of three to ten years and penalties of 50,000 yuan ($7918.28) to 500,000 yuan.

Fines for smaller transactions range from 20,000 to 200,000 yuan. The new law will take effect on March 1st.

The supreme court’s decision also puts an end to rumors that the country would not entirely ban crypto in the nation. Eastern Zhejiang province recently increased power costs for cryptocurrency miners, implying that the government attempted to discourage crypto mining through high bills rather than legal action.

The action did not affect the crypto market, though, as the attention remained on Russia-Ukraine tensions. Markets had recovered overnight as stocks confidence increased.

China’s stance on cryptocurrencies should not be misinterpreted as an indication that it is ready to ignore the fundamental technical revolution that blockchain technology and tokenization have brought about.

The country is nearing the end of its digital yuan tests, which have already begun in several pilot projects around the country.

During the second half of 2021, a digital form of the country’s national currency, the digital yuan, was utilized in over $8 billion in transactions.

China’s measures to control and restrict crypto usage on its land are likely aimed at reducing the number of citizens and organizations using decentralized blockchains to conduct business.

The Russia-Ukraine conflict and China’s cryptocurrency rules appear to have impacted the entire cryptocurrency market. However, cryptocurrency remains a lifeline in conflict situations.

Cryptocurrency trades makes big moves in gold dominated India

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The cryptocurrency market’s popularity vector has broken all ceilings with every realm of the financial world paying close attention to its developments. Even with all the recurring price fluctuations, the industry seems to have instilled a sense of trust amongst the public especially in nascent markets such as India.

Recent reports from the subcontinent claimed that the usually gold-obsessed Indians were pouring billions of rupees into the world of digital assets. Most of the investments came from the younger age group of 18-35, a generation that was reversing the trend set by their predecessors. Indian households contain close to 25,000 tonnes, most of which are seen as generational assets. Even in this climate, the cryptocurrency market has grown in leaps and bounds with transactions accounting for over $200 million.

Many young Indians agree that they would rather put their money into crypto than a traditional asset like gold. New traders have found out that the short-term sales and big profits made digital assets a more lucrative purchase than a majority of the options available now. The privacy and transparency aspect of digital assets was another beacon for new entrants to the market. Sandeep Goenka, the founder of Zebpay added:

They find it far easier to invest in crypto than gold because the process is very simple. You go online, you can buy crypto, you don’t have to verify it, unlike gold.

Despite the industry’s success, it still had some way to go before it can overtake the gold market in the country. As of now, India’s $40 billion cryptocurrency market trails behind the Red Dragon’s $161 billion. For now, the increasing adoption is another sign of Indians’ willingness to take risk within a consumer finance sector that’s plagued with examples of regulatory short falls.

Crypto’s current stardom comes a few years after the Reserve Bank of India banned transactions in the country after calling out frauds and weak legislation. The ecosystem continued to receive pushback even after the Supreme Court quashed the ban last year and made all cryptocurrency transactions legal in the country. Investors believe that over time, digital assets will be adopted by nations worldwide.

Supreme Court of US Moves to Curb SEC’s Control Over Penal Fines on Crypto Firms

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The United States Securities Exchange Commission (SEC) has been limited in penalizing irregularities with fines. The Supreme Court of US ruled on June 23 to restrain the amount of fine that the watchdog can inflict on crypto and blockchain-related companies.

The ruling of the U.S. apex court in the National Law Review states that the SEC can not impose fines (disgorgement) that exceed the profits generated by illicit proceeds. In addition, penalties may only be imposed for the benefit of victims, not as penal damages.

The new ruling will apply in the course of the proceedings to all litigants. Still, to cryptocurrency and blockchain companies, this is a strict definition of the penalty that must be equivalent to the offense when it comes to financial penalties. The SEC is already restricted by a five-year limitation period when it is imposed.

Substantial fines forced by the SEC in the past

In May, the SEC, in a case against BitClave, ordered the startup to refund $25.5M to investors after finding the firm guilty of distributing unregistered securities. The lawsuit also included $3.8 million in fines and interest. Moreover, the authority also indicted an ex-pastor and his wife for pilfering $500,000. Part of the amount was gained through a fraudulent cryptocurrency offering backed by a mineral water firm.

In that case, the SEC imposed fines equivalent to the stolen funds, on top of interests and civil penalties. The total amount exceeded the $500,000 that the two allegedly defrauded investors. However, the latest Supreme Court ruling would have inflicted a $500,000 fine, the amount reportedly stolen by the couple.

Supreme Court of US ruling leniency

In fact, under the new ruling, if the couple had used some of the ill-gotten funds in the water business that supported the offer, the amount spent would have been subtracted from the total amount after the SEC had fixed the due penalty.

The SEC is one of the most active financial regulators in the United States. The authority is always combating fraudulent schemes in the blockchain and cryptocurrency space.

The Indian Cryptocurrency Saga: From Bans to Massive Investments and Everything In Between

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India has always been an epicenter of growth and development, with a large demographic that plays a key role in creating markets. The population of the country has also been a major pull for cryptocurrency companies that have understood the impact it could have on mainstream adoption. All this conceptualisation came to a grinding halt in April 2018 when all forms of cryptocurrency transactions were banned by the country’s primary bank.

The Supreme Court of India finally lifted the ban in March 2020 after months of trials and legal battles by crypto-currency evangelists. This decision has brought in a wave of new investments and the South Asian subcontinent looks bright for the future. Let’s look now at how India’s virtual asset industry has changed and where it can go from that point forward.

Since Bitcoin ‘s inception, world governments have been scrambling to ensure that regulatory clarity in terms of the cryptocurrency industry is maintained. India has also been caught in the mix, debating the industry and how it can be managed.

2018 and the RBI ban

India had a functioning and thriving community of crypto-currency prior to the ban. Several crypto-currency exchanges and companies played a prominent role in creating the ecosystem of digital assets in India. Once the RBI made it illegal for cryptocurrencies to act as legal tender, major players like Zebpay and Coinex almost instantly had to shut down shop. Some organizations have decided to leave the country and take their business to another location. Analysts noted that despite the ban, there were still several citizens trading in crypto although using foreign exchanges.

The Supreme Court- Crypto’s Messiah

The cryptocurrency ban revealed one thing about the Indian masses-the would not take anything sitting down. Once the ban was in place, several cryptocurrency supporters and evangelists made it a point to move the country’s highest court for a fair trial. Non-profit groups and associations hired their own legal teams to make crypto’s case which finally came to fruition in March.

According to the Supreme Court’s latest decision, cryptocurrencies were no longer an illegal tender in India. This also meant that traders could finally make INR to crypto transactions without having to worry about conversions rates related to stablecoins or foreign currencies.

The Indin Cryptocurrency Scene Now

All doubts about the effectiveness of the court’s decision were removed when Indian traders jumped into the fray once more wholeheartedly. Reports showed that in the month of March alone, the Nischal Shetty founded Wazir X saw a whopping 400 per cent rise in trading volume. The exchange witnessed a 270 per cent spike the following month, unheard of consecutive figures in the Indian cryptocurrency community.

India’s potential was also recognized by the Chnaghpeng Zhao led Binance, which initiated a $50 million fund to promote blockchain technology in India. This was done in partnership with WazirX with a promise to build a more sustainable digital asset ecosystem in the country. Shetty, who is also the chief executive of WazirX had said:

“They [investors] have realized that a lot of startups are mushrooming and they want to be the early movers,” he said. “In the US, there are huge investments taking place (in crypto startups) since 2010, which will also happen in India.”

What does the future hold?

There is no doubt that, now that the ban is lifted, more and more investors will continue to make inroads into the country. Popular organizations such as BeFaster and CoinSwitch recognize that the wide scale scope offered by the population of the country is incomparable to the rest of the world.

If proper steps are taken, the companies mentioned above will have access to millions of traders most of whom are under the age of 30. Blockchain-based applications such as BeFaster will be attractive to the younger generations due to their focus on fitness and health. Customers of the application will also be able to earn tokens according to how they use it. BeFaster’s Co-Founders and CEOs, Irina Manilitsch told TWJ that:

“The fact that the government of India is opening up to cryptocurrencies right now is a great opportunity for investors and the population. The people of India will now also have the opportunity to generate additional income just by moving. Investors, on the other hand, now have the chance to invest in the future and a booming market.”

The path toward mainstream acceptance, however, is not all rosy. Reports have said some crypto companies still find it hard to operate in India because some banks refuse to deal with them. For their part, the banks have referred to the criminal activities that are being conducted using crypto as the key deterrent. If the crypto-currency industry needs to take off in India, exchanges and companies are responsible for providing a safe and legal environment for virtual asset trading.

 

 

 

RBI Calls Out all Banks Who Refuse to Provide Accounts to Crypto Organizations, Claims There Are No More Bans

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The Indian market has always been seen as an enemy of the cryptocurrency industry, with Reserve Bank of India  (RBI) acting as an antagonist. Indian cryptocurrency supporters were recently won by the Supreme Court’s decision to lift the 2018 crypto ban.

Despite the change, there have been some industry complaints about mainstream banks preferring traditional set-ups rather than emerging virtual asset companies. In order to combat this difference of opinion, Unocoin, co-founder of BV Harish, took matters into his own hands.

Just recently, Harish filed a  Right to Information [RTI] with the Supreme Court to inquire whether provisions were in place to address the bias shown by the institutions. The Reserve Bank has expressly stated that the new legislation applies equally to all bodies, regardless of their affiliation with the financial department. The RTI premise was based on a report that banks were not issuing accounts to cryptocurrency traders.

The RBI took almost a month to respond to the initial RTI that was much talked about in the cryptocurrency world. According to the central bank, there were no prohibitions or restrictions that would set aside any individual or organization working in the digital asset world. The main reason for the bank’s reply was the sheer number of complaints from the Crypto Department. Speaking on the RBI’s latest revelation, Harish said:

“ Bankers have been saying that they need new RBI circulars mentioning that there are no more restrictions for them to provide bank accounts for crypto businesses. Now, we have received a positive response from the RBI. ”

The RBI was just one of the bodies that responded to the requests, while several major players remained silent on the issue. Banking giants such as SBI, HDFC, and Axis Bank have yet to comment on the plight of cryptocurrency officials. Despite the backlash from the mainstream community, enthusiasts like Harish are out to prove how crypto can benefit people.

Ever since the original ban on crypto was lifted in March, the people involved in the sphere predicted that the ride would not be as peachy as it seems. It makes sense why the banks did not pay any attention to crypto: restricted mindset.   Many supporters believe that if major organizations could overcome the mental hurdle, a lot of pieces would start to fall into place.