IAMAI-BACC To Set Up Formal Board For Self-Regulation Of Crypto Exchanges In India

The Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), is setting up a formal board to oversee the implementation of a self-regulatory code of conduct for member crypto exchanges. 

A formal board comprising eminent jurists, technical specialists and fintech compliance specialists is being set up to oversee the implementation of this Self-Regulatory Code, IAMAI-BACC said in a statement. “In parallel, IAMAI has also suggested that the government regulate crypto assets through an act of parliament,” said an IAMAI-BACC spokesperson.

The association welcomed the pro-active clarification when the Reserve Bank of India finally issued a clarification over banks blocking crypto transactions citing RBI’s notification. In its notification, the central bank has clarified that since the RBI notification vide April 6, 2018 that had banned banks from extending any services to crypto startups has been set aside by the Supreme Court, the same can no longer be cited by the banks for blocking crypto transactions. 

The self-regulatory code, which is already in place, includes voluntary compliance with anti-money laundering, combating against financing of terrorism, and know your customer regulations, and other company and taxation laws. India’s largest exchanges, CoinDCX, Unocoin, Paxful, WazirX and ZebPay, are among the members of BACC. 

On Monday, the Reserve Bank of India said that banks should not use its April 2018 circular — struck down by the Supreme Court in 2020 — to warn customers of penalties for dealing in cryptocurrencies. The court’s verdict was in response to a petition filed by IAMAI and crypto exchanges. The central bank has, however, asked banks to continue carrying out due diligence on customers prescribed under existing regulations.

Naveen Surya, chairman of the Fintech Convergence Council, and chairman emeritus of the Payments Council of India (PCI), said, “Members of BACC of IAMAI are committed to the highest level of business integrity and comply with applicable rules and regulations laid down by the RBI and various regulatory authorities in India.”

“We also respect the concerns that banks may have around anti-money laundering policies. Discussions around this will make the industry stronger and investments safer,” said Sumit Gupta, CEO and co-founder of CoinDCX.

A year after the Supreme Court’s verdict, leading banks — HDFC Bank, ICICI Bank, State Bank of India and many others continue to block crypto transactions citing RBI’s long-standing stance on cryptocurrency. In the last one month, as the crypto transactions escalated exponentially, while ICICI blocked the B2B services for crypto startups, HDFC and SBI sent fresh emails to their consumers threatening them to stop making crypto payments, else their accounts or credit cards could be blocked.