The India crypto industry may amend its code of conduct. India’s bitcoin exchanges are debating whether to make adjustments. To their self-regulated code of conduct. In order to avoid encounters with regulatory authorities.
As a result of increased monitoring of the business by regulatory authorities. Such as the Income Tax Department, the Enforcement Directorate. And others, the move has been welcomed by the industry.
On Monday, the Financial Times reported that the government. May postpone the introduction of the Cryptocurrency Bill in the forthcoming budget session of Parliament. Because it wants to hold additional negotiations and get a consensus. On a legal framework for the embryonic industry.
Members of the Blockchain and Crypto Assets Council (BACC). Including leading cryptocurrency firms such as WazirX Inc., CoinDCX Inc., CoinSwitch Kuber Inc. And others, are now working on updating the ‘Code of Conduct (COC),’ according to people familiar with the situation. The BACC is a member of the Internet and Mobile Association of India. Which is an industry trade association (IAMAI). In the lack of legal regulations. The BACC has served as a voluntary Self-Regulatory Organization (SRO) for the construction industry.
In response to ET’s requests for comment, the IAMAI and BACC did not answer.
The World Economic Forum’s Davos Agenda 2022 virtual event. Which took place on Monday, featured a speech by Prime Minister Narendra Modi. In which he called on multinational corporations to govern the rapidly expanding industry.
Modi urged multinational firms to regulate the booming industry
Crypto-selling platforms may add pertinent warnings and banners. When onboarding new customers to their platforms, according to a person involved. With the discussions. These warnings and banners will inform users. About the unpredictable nature of the bitcoin market. According to a second person who has firsthand knowledge of the conversations. Guidelines are being established for customer protection measures. Such as the safekeeping of client cash, transaction settlement. And consumer-facing contact with the company’s customers.
“At the moment, there is no defined structure for terms and conditions. Or risk warnings,” said a source familiar with the conversations. Who spoke on the condition of anonymity due to the sensitivity of the discussions. It is our intention to incorporate this into the standards as well. So that the warnings users receive are consistent across the board.
Another topic under consideration is the recruitment of an experienced tax professional. From one of the Big Four accounting firms to conduct an audit. And give members with tax compliance recommendations and recommendations.
According to the Directorate General of Goods and Services Tax Intelligence (DGGI). Some bitcoin selling platforms may be engaging in tax avoidance practices. Prompting the inquiry.
It was decided to make changes to the code in order to address concerns made. During last year’s conversations between cryptocurrency selling platforms and the Reserve Bank of India (RBI). As well as during hearings before the Parliamentary Standing Committee on Finance. A number of changes will be made to the code. Including provisions for investor protection and expanded industry rules, among other things.
The BACC’s primary areas of debate to the India Crypto industry
Members of the BACC, which includes crypto exchanges, decentralised finance startups. And NFT markets, are debating a number of issues. Including how to improve consumer safety by giving warnings. And establishing regulated tax practices.
“When you look at the fundamental issue that the RBI and the government raised. It was whether the investor was adequately informed also about the risks associated. With investing in cryptocurrencies,” said one of the industry sources. Who also works with crypto companies. “When you look at the fundamental issue that the RBI and the government raised. It was whether the investor is adequately informed about the risks. Associated with investing in cryptocurrencies,” said another industry source who works with crypto companies. “Through your ads, your onboarding process, or your Know Your Customer process. Are you instilling the idea that what you’re doing and proposing is risky?” “Are you instilling the idea that what you’re doing and proposing is risky?”
Moreover, In the lack of formal regulations, the code of conduct adopted. By members of the BACC serves as a guide also for the organization’s members.
As a result of the increasing acceptance of cryptocurrency by retail customers. Over the last six months. Crypto selling platforms have come under the scrutiny of a number of government agencies.
Among other things, the revised code will also incorporate the Advertising Standards Council of India (ASCI). Standards on cryptocurrency advertisements, which are anticipated to be implemented shortly.