Cryptocurrency players struggle to operate within one percent TDS policy

Cryptocurrency players struggle to operate within one percent TDS policy

The imposed tax has adversely impacted short-term investors and day-to-day trading volume

A 30% taxation on income from cryptocurrency and other virtual assets, was followed with the government’s decision to add a one percent tax deductible at source (TDS) on cryptocurrency transactions from July 1, this year. Even as this appeared as the first step towards regularising the sector, it is felt that the industry is reeling under an adverse impact of such steps. “From the perspective of cryptocurrency trading volume, it has dropped. The implementation of these tax laws has caused the stagnancy of Indian cryptocurrency markets. Prices are also getting lower. Short-term and day traders will get affected due to the implementation of the one percent TDS,” Shivam Thakral, CEO, BuyUcoin, told FE Online.

Industry expert opined that the move by the government will ward off investment from international players. According to Anndy Lian, chairman, BigONE exchange, this will affect the market’s liquidity and foreign investors will look to stay away from Indian markets. “It will not be sustainable for investors in the long run. Active traders will get adversely affected as it would decrease day time trading. The overall market conditions would deteriorate, as more Indian cryptocurrency exchanges will look to settle outside,” he added.

What is to be noted that due to looming uncertainty over regulations and policies, a few companies have already shifted base to other markets such as Dubai. “The transition of Indian exchanges will have an impact on the overall cryptocurrency scenario within a year. I think the Indian government will see a huge efflux of cryptocurrency investors and developers in the near future,” Lian said.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Singapore’s crypto players face added scrutiny under new law

Singapore’s crypto players face added scrutiny under new law

SINGAPORE — Singapore on Tuesday passed a law that extends its cryptocurrency regulations to companies with a local presence that provide digital token services outside the city-state, as authorities further tighten rules around the emerging industry.

Lawmakers approved the Financial Services and Markets Bill 2022, which was brought up in parliament for debate on Monday. The law brings digital token service providers created in Singapore but who provide their services elsewhere under the purview of domestic regulators.

The legislation covers industry players who deal in Bitcoin, Ethereum and other digital currencies, facilitate their exchange or offer financial advice on the sale of these tokens, among other activities.

Crypto players operating in Singapore and serving the local market are already regulated by the city-state’s central bank. They are required by law to adhere to licensing requirements as well as be able to guard against money laundering and terrorist financing.

But those who do not provide digital token services in the city-state were not under the same oversight. The new law changes this, requiring all crypto players, whether they serve the local or foreign markets, to come under the same licensing requirements.

“Sad, disappointed — we went 10 steps backwards,” said a member of a crypto lobby group in Singapore who spoke on condition of anonymity. The source questioned the necessity of digital asset players with a base in the city-state being licensed if they do not target domestic consumers, which was a worry for the central bank. “So MAS [the Monetary Authority of Singapore, the city-state’s financial regulator and central bank] is making the assumption that the license is like gold — that everyone will want to get it?”

Alvin Tan, a board member of the MAS, explained the state’s reasoning to parliament on Monday.

“We could be exposed to reputational risks brought by digital token service providers created in Singapore, and which provide services relating to virtual assets such as Bitcoin outside Singapore,” he said. “The FSM Bill seeks to mitigate such risks by licensing these players and imposing AML/CFT requirements on them.”

Singapore is not alone in tightening its scrutiny of the booming crypto sector.

Last month, Thailand issued a ban against payments using cryptocurrencies and other digital assets in a bid to maintain stability in financial markets.

China has banned all cryptocurrency payments and services for disrupting the “economic and financial order.”

In 2019, Japan’s Financial Services Agency imposed stricter information technology requirements on licensed exchanges, following security breaches and hacking incidents that marred the industry.

In January, Singapore published a set of guidelines instructing crypto players to stop marketing or advertising their offerings to retail investors in public spaces, both physical and virtual, calling the trading of such assets “highly risky and not suitable for the general public.”

The law approved on Tuesday has also garnered some positive reactions.

Singapore-based Anndy Lian, chairman of Netherlands-registered crypto trading platform BigONE Exchange, told Nikkei Asia that the city-state’s enhanced regulations are “reasonable.”

“If you walk the ground hard enough, you will see many bad actors and dubious crypto companies using Singapore as a base of their operations,” he said. “We need to properly regulate things so that the bad actors won’t affect this industry’s image.”

Even before the new law hit the books, the MAS had been busy processing license requests. In January it said there were about 180 applications for permits, more than 60 of which were withdrawn or rejected. Only a handful of applicants were successful, though others were awaiting the central bank’s decision.

With the tightened regulations, the central bank is poised to sift through a batch of additional license requests as Singapore-based crypto players that mainly deal overseas are now required to meet the state’s standards if they want to use the city for their operations.

In March, Singapore-based payments company Digital Treasures Center, which provides a platform to facilitate cryptocurrency transactions, said it received in-principle approval from MAS to provide digital payment token services.

Desmond Yong, its chief strategy officer, told Nikkei that crypto players will need to devote additional resources to monitor foreign transactions so as not to run afoul of the new law.

“For companies that are unable to fulfill the AML/CFT requirement, they will need to move out to other countries,” he said. “But with more governments regulating cryptocurrency in different jurisdictions, these companies will soon find it hard to operate.”

 

Original Source: https://asia.nikkei.com/Spotlight/Cryptocurrencies/Singapore-s-crypto-players-face-added-scrutiny-under-new-law

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Global players flag ‘one size fits all’ approach in FM’s crypto tax

Global players flag ‘one size fits all’ approach in FM’s crypto tax

Additional comments on this article:

The feelings from the global market are positive in general. Now that the parameters are clear and India’s stand on crypto is considerably straightforward. Institution investors are looking forward to making some serious investments in India. In the last 2 days, I have seen new investments by fellow venture capitalists into public blockchain projects, meme coins, incubators and innovation labs. Crypto exchanges and projects are also working around the clock to onboard new users in India too. These are positive signs on the ground too.

Of course, on the other hand, there are users who are complaining non-stop about the tax and putting out statements that crypto should be decentralized, our government should not interfere.

Such wishful thinking would not be fulfilled by the regulators. The rules are in place acts as a form of control and protection for the Indian market. I am certain the users will get used to it and be reasonable about it soon.

– Anndy Lian

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Global players flag ‘one size fits all’ approach in FM’s crypto tax

Synopsis

While this is a positive step towards the adoption of technology for the future, a flat 30 per cent tax without any loss offset is alarming to a lot of investors, said Aliasgar Merchant, Developer Relations Engineer of New York-based Tendermint.

New Delhi: The recent announcement by India’s Finance Minister Nirmala Sitharaman to tax all private virtual assets at a flat rate of 30 per cent although lauded by global players has faced some scepticism regarding the approach.

Sitharaman on Tuesday announced that the taxation will be applicable without any exemption or deduction and the loss arising from the sale of virtual assets cannot be set off against income.

While this is a positive step towards the adoption of technology for the future, a flat 30 per cent tax without any loss offset is alarming to a lot of investors, said Aliasgar Merchant, Developer Relations Engineer of New York-based Tendermint.

Crypto exchanges and other projects are working towards getting Indian users on board after the announcement by FM in Budget 2022. Global crypto players believe that the tax clarity will enable fence-sitters to activate their India investments. Although some have flagged a lack of clarity around the announcement.

Bill Hugues, Senior Counsel & Director of Global Regulatory Matters at ConsenSys said, “The government’s move delays resolution of the issue. All things considered, it is still better than proposing a bad rule. But the chances of a bad rule remain and that is something that should concern anyone who cares about innovation in this space.”

The recognition of cryptocurrency in the Indian budget is definitely a positive step towards the future, believe experts. Many countries are considering crypto regulations, and India is paving a positive path for the industry, they said.

“As India is moving towards being a global superpower, it is imperative that the government starts recognizing and adopting cutting-edge technologies like Blockchain,” said Merchant, adding that the introduction of CBDC is welcome while all eyes are on its timely implementation.

Anndy Lian, Chairman, BigONE Exchange believes that institutional investors are looking towards making investments in India. He is positive about new investments by venture capitalists into public blockchain projects, meme coins, incubators and innovation labs.

There are users and industry players who are critical of the tax move and say that cryptos being decentralized, should not be regulated. Others are sceptical over treating all the virtual assets including tokens, coins, NFTs under one umbrella.

A one size fits all approach would likely fail to address any actual risks and unnecessarily constrain uses that are popular and not a public policy concern, they said.

“There is plenty of reason to believe that sensible regulation of the crypto space will be where we end up,” Hughes added. “But nothing is for certain with respect to regulation in this space, in any part of the world.”

 

Original Source: https://economictimes.indiatimes.com/markets/cryptocurrency/global-players-flag-one-size-fits-all-approach-in-fms-crypto-tax/articleshow/89343655.cms

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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