WazirX, a cryptocurrency exchange based in India has received a notice from the government of India, warning them about the potential implications of their operation. The notice was handed over by the Enforcement Department of Goods and Services Tax (GST) which alleged that WazirX did not abide by the conditions and clauses of the GST.
WazirX, a cryptocurrency exchange based in India, was issued a notice by the Indian government on Thursday, August 8th, for violating the Foreign Exchange Management Act (FEMA). The notice stated the exchange allowed citizens of India to buy bitcoins through the WazirX platform. The Indian government has claimed that cryptocurrency exchanges like WazirX are violating the FEMA and have urged the government to regulate the industry.
Was it a coincidence or a planned attack?
Historically, India has been very cynical about cryptocurrencies. However, the government’s attitude towards cryptocurrencies seems to be changing as cryptocurrencies, especially bitcoin, become more prevalent in the country and more accepted. Recent media reports have revealed that the government no longer plans to ban cryptocurrencies in India. A recent report by the Indian Express claims that India’s finance ministry has held talks with the crypto industry and that the government will now soon unveil its plans to classify bitcoin as an asset class. It is also reported that the market regulator, Securities and Exchange Board of India (SEBI), will be responsible for overseeing the cryptocurrency market in India. A bill to regulate cryptocurrencies is likely to be introduced in parliament in the coming monsoon. It is possible that the ED’s petition against WazirX will create FUD (fear, uncertainty and doubt) among Indian investors. Crypto investors tend to follow and react to both positive and negative news, so it doesn’t take long for FOMO or FUD to emerge. It is common knowledge that the Indian government and the RBI have never supported cryptocurrencies. The timing of the announcement seems unusual as India moves towards regulation of crypto currencies, and one wonders if the announcement was made specifically to scare Indian crypto currency investors, or if it was just a coincidence. The number of cryptocurrency users in India has exploded since mid-2020, forcing the current government to change its stance on cryptocurrencies. Moreover, the recent historic event in which El Salvador accepted bitcoin as legal tender may have forced governments around the world to look at cryptocurrencies with fresh eyes.
Are your funds safe with WazirX?
WazirX is one of the trusted cryptocurrency exchanges in India and also the largest cryptocurrency exchange in India. The platform recently recorded the highest trading volume of $270 million, showing the growing interest in the Indian space. WazirX has had its share of controversy as well. In a recent event, some WazirX users suffered losses when the prices of SHIB tokens skyrocketed on the exchange platform. Many WazirX users were upset by this and blamed the cryptocurrency exchange for their losses. WazirX has announced an air shipment of WRX tokens to affected wallets to offset their losses. This move by WazirX has helped it gain immense trust among Indian traders and proved that the platform is committed to ensuring the safety of its users’ funds. Overall, India is moving in the right direction. If the Indian government gives the green light to bitcoin and other cryptocurrencies, it is likely to lead to a new phase of the Indian crypto industry. There may be some challenges along the way, but eventually India will likely be forced to regulate the industry, which will hopefully be good for the entire cryptocurrency space.