Penalty Of INR 20 Cr Or 1.5 Year Jail Term Likely On Violation Of Upcoming Crypto Norms

The much awaited cryptocurrency bill is likely to propose a monetary penalty of INR 20 Cr or a jail term of 1.5 years in case of violation of its norms.

Citing people in the knowledge of the developments, Bloomberg reported that the government may also consider prescribing a minimum threshold for investing in crypto assets to safeguard small investors.

The government has listed The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction in the Parliament during its ongoing winter session.

Speaking on the bill, Finance Minister Nirmala Sitharaman had said on Saturday (December 4th, 2021) that a “well consulted” bill is coming through and it will be tabled in the Parliament, once the Cabinet clears it.

Cryptoassets, Not Currency

The government is expected to recognise cryptocurrencies as an asset class, and prohibit their usage as currency.

The Bloomberg report said that the bill is likely to use the term ‘cryptoasset’ rather than ‘cryptocurrencies’. 

Last week, an NDTV report had said that the much awaited bill will propose to bring crypto assets under the regulation of capital markets regulator SEBI.

On Monday (December 6th, 2021), Pankaj Chaudhary, the Minister of State for Finance told the Lok Sabha that the government does not plan to boost the cryptocurrency sector in the country.

Concerns Over Likely Blanket Ban

Concerns and apprehensions have been doing the rounds over a likely ban on all cryptocurrencies and investments into them.

Concerns were fueled among the stakeholders as the description of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, showed that it “seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.

Speaking at the Hindustan Times Leadership Summit on Saturday (December 4th, 2021), Finance Minister Sitharaman had said that there is a lot of speculation going on in the matter which is not healthy at all.

No Data Related To Crypto With the Government

The government during this session of the parliament has told both the houses that it does not collect data on the cryptocurrency transactions and that there is no ready information on tax collected from investments made in the virtual asset.

On Monday too, in response to a question on the number of people who have invested or are using bitcoin in the country, the Minister of State responded that the government does not collect such data.

Growing Crypto Market

India has more than one crore crypto investors, and the number is significantly growing every day, with several domestic and global crypto exchanges operating in the country.

The investment in cryptocurrencies grew from nearly $923 Mn in April last year to $6.6 Bn in May this year in India. According to a report released in August by blockchain data platform Chainalysis, India ranks second out of 154 nations in terms of cryptocurrency adoption.