Indian regulators are reportedly considering a new ban on cryptocurrencies. The government has been consulting with experts who support the idea of banning crypto in favor of a central bank digital currency (CBDC). Sources familiar with the discussions indicate that there is a consensus that the risks associated with cryptocurrencies outweigh their benefits. One source even stated that CBDCs can offer similar functionalities as cryptocurrencies while providing additional advantages. This has raised questions about whether India will indeed ban crypto again.
Challenges faced By Indian CryptoCurrency sector
The Indian cryptocurrency sector has faced regulatory challenges in the past. In 2018, the Reserve Bank of India (RBI) prohibited financial institutions from servicing crypto firms, but this ban was later overturned by the Supreme Court. In 2021, there was another proposal to impose a ban on cryptocurrencies. However, instead of an outright prohibition, the government introduced a stringent tax regime in 2022, imposing a 30% tax on crypto income and an additional 1% levy on each transaction. As of now, India's CBDC, known as the digital rupee, is in its pilot phase, with retail tests reaching about 5 million users, according to the RBI.
Lazarus Group Linked to Recent Crypto Hacks
In other news, the Lazarus Group, a suspected North Korean hacking group, has been linked to recent hacks of cryptocurrency exchanges, including BingX and Indodax. Security experts have indicated that both hacks might be connected through the use of a common address. The Lazarus Group is believed to be responsible for the $22 million hack on Indodax in September, and recent evidence suggests they may also be behind the BingX attack.
This year, North Korean hackers have been involved in some of the largest cyberattacks targeting Asian crypto exchanges. For instance, Japan's DMM Bitcoin faced a $305 million exploit in May, while India's WazirX lost $235 million in July. Recently, WazirX has come under scrutiny for allegedly conducting a “disinformation campaign” in the wake of the breach, leading to further discussions about security in the crypto space. With ongoing discussions about a potential crypto ban in India and rising concerns over Lazarus crypto hacks, the landscape for cryptocurrencies in India continues to evolve.
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