Sunday, February 5, 2023

ED Issues Notice Regarding Crypto Withdrawal Against WazirX

Indian crypto exchange WazirX has received another notice from the country’s financial watchdog Enforcement Directorate (ED), reports Economic Times. 

This time the Indian regulatory body has asked the crypto trading platform “why withdrawals from the crypto wallet are not a violation of India’s Foreign Exchange Management Act (FEMA).”

The crypto industry is already dealing with so many issues related to regulatory compliance and the new notice regarding crypto wallets withdrawals would make things difficult for crypto exchanges in India.

This would be the second notice in a row to WazirX from ED. A month ago, the financial watchdog issued a show-cause notice to the crypto trading platform regarding a money-laundering scandal involving a Chinese betting racket.

The notice issued to WazirX would not only affect the exchange but the whole Indian crypto industry. It has raised questions on the legitimacy of crypto transfer from one crypto wallet to another.

Back in 2018, when the Reserve Bank of India imposed the banking ban it was clear that the authorities only had issues with banking withdrawals. But now, the notice has been issued to a crypto exchange, which poses a risk to the whole crypto trading ecosystem. 

As per the report, “The regulatory dilemma in India has taken several turns this bull season. First, there were rumors of a possible crypto bill listing during the upcoming parliament session, however, that didn’t happen as the crypto bill didn’t find a place in the 17 bills listed for the monsoon session. Later there were reports of imposing an additional 18% tax on the foreign exchanges offering their services to Indian customers.”

India is not the only country, who is planning to regulate crypto assets, there are several other countries thinking of the same. A few of them are already regulating it under existing finance laws, while others are working on framing new rules. 

The crypto investors in India also thought that soon the government would regulate the digital assets in the country, but till now it did not happen. In fact, the government was going to present the crypto bill in the monsoon session this year, however, despite that 17 other bills got approval for being tabled in the Parliament. 

Although there was uncertainty regarding crypto regulations in India, the industry was still thriving. But the recent, notice by ED to WazirX might halt the Indian crypto industry’s progress.

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