Bitcoin markets are reacting to fresh regulatory comments on crypto from India’s finance minister Arun Jaitley, made during his most recent budget speech in the Parliament today. After Jaitley noted in his speech that cryptocurrency is not legal tender in the country and promised a crackdown on “illegitimate activities” involving crypto, a flood of misinterpreted comments warning of an outright ban appeared across the mainstream press and social media.
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After Jaitley noted in his speech that Cryptocurrency is not legal tender in the country and promised a crackdown on “illegitimate activities” involving crypto, a flood of misinterpreted comments warning of an outright ban appeared across the mainstream press and social media. Markets in turn fell in trading on Thursday, Bitcoin dipping below $9,512 after breaking $10,300 Wednesday, Jan. 31, data from Bitstamp shows.
India has been sporadic in its attempts to formalize cryptocurrency regulation over the past two years. Since the country’s currency reforms, interest in Bitcoin especially has skyrocketed, with local exchanges reporting huge growth.
This week’s slump brought the total market value of cryptocurrencies down to around $400 billion, half the high it reached in January, according to industry tracker Coinmarketcap.com. The market value of cryptocurrencies is calculated by multiplying the number of digital coins in existence by their price, although many question whether that is the right way to value them. This week’s slump brought the total market value of cryptocurrencies down to around $400 billion, half the high it reached in January, according to industry tracker Coinmarketcap.com.
The second and third largest virtual currencies, Ethereum and Ripple, also plunged more than 20 percent at the session low, Coinmarketcap.com said. Ethereum was last down 13.2 percent, at $888.22, while Ripple last traded at 83 U.S. cents, down 14.7 percent.
Retail investors have poured money into digital coins, enticed by the huge run-up in prices. Regulators say cryptocurrencies are highly speculative and dangerous investments.The second and third largest virtual currencies, Ethereum and Ripple, also plunged more than 20 percent at the session low, Coinmarketcap.com said. Ethereum was last down 13.2 percent, at $888.22, while Ripple last traded at 83 U.S. cents, down 14.7 percent. A massive $530 million hack of a Japanese cryptocurrency exchange last week renewed worries about the security of the industry. Retail investors have poured money into digital coins, enticed by the huge run-up in prices. Regulators say cryptocurrencies are highly speculative and dangerous investments.[bs-quote quote=”They are likely to be successful with a raise given their success as a platform to date.” style=”style-20″ align=”right” author_name=”Pavel Durov” author_job=”Founder of Telegram” author_avatar=”https://cryptousanews.com/wp-content/uploads/2020/06/crypto-press-quote-avatar.png”]
The company is using the Simple Agreement for Futures Tokens (SAFT) structure, in which money is raised from accredited investors before a functioning network is built, in order to avoid running afoul of securities laws. The grams, eventually delivered to the SAFT investors, could then be resold to consumers. Calling the presale’s minimum investment of $1 million and cap on proceeds high and its one-year lockup long compared to other token sales before it, DiPasquale still continued optimistically.
The roadmap goes on to state that the first related product, “External Secure ID,” will launch in the first quarter of 2018, with all other products to be rolled out by the first half of 2019. And the Telegram founders’ control of the project will shift to a non-profit foundation by 2021. The remaining 52 percent will be “retained by the TON Reserve to protect the nascent cryptocurrency from speculative trading and to maintain flexibility at the early stages of the evolution of the system,” the primer states. The ICO is likely all or a part of the three Telegram co-founder Pavel Durov told his followers about on his public Telegram channel on New Year’s Eve.
However, with the minister saying Bitcoin is not coin or mode of payment, questions remain on how it will be treated from now. Even if it is treated as a commodity, imposing goods and services tax (GST) on it will not be simple. A government official on Friday said that the government was yet to give a thought to the GST aspect of cryptocurrencies.
Bitcoin exchanges say they provide a service and on the brokerage that they charge can be subject to GST. Vaibhav Parikh, partner at Nishith Desai Associates, says: “Cryptocurrencies can be treated as a capital asset for tax, unless you are in the business of buying and selling, in which case it will be business income.” On Jaitley’s statement, he said: “Cryptocurrency would be discouraged but not banned.”