India Freezes Over $46M Worth of Crypto Assets Belonging to Vauld
- The Indian government is keen to take advantage of the growing crypto market at all costs.
- As one of the most populated countries in the world, its regulators want the best crypto services for its people.
India’s Enforcement Directorate (ED) has frozen $46.4 million (3.7 billion rupees) worth of digital assets belonging to crypto exchange, Vauld. Notably, Vauld is backed by billionaire investor, Peter Thiel, and made a bankruptcy filing in Singapore last month.
The crypto firm filed for bankruptcy a few days after suspending withdrawals on its platform, citing market conditions. The platform had substantial withdrawal requests as the crypto winter hit harder.
India Cracks Down on Crypto Firms
Reportedly, the ED is investigating ten other crypto exchanges in connection with their roles in using crypto to help international companies launder money. The ED also alleged these local firms violated central bank policies in their transactions and abused personal data and offensive language to intimidate loan takers into paying excessive interest rates.
In related news, a recent Bloomberg article suggested that the current crypto winter has convinced the Reserve bank of India (RBI) that its disregard for cryptos is justified. Furthermore, the RBI has never been a fan of cryptos.
Four years ago, India’s banking regulator mandated banks not to have any dealings with players in the crypto industry.
However, the RBI’s decision was overturned in 2020 when the Indian supreme court ruled that the RBI’s instruction was unconstitutional. Since then, Indian regulators have been taxing crypto transactions without regulating the industry. Hence, there has been a lot of confusion in the industry. However, a recent supreme court ruling upheld provisions in the Prevention of Money Laundering Act, PMLA.
This act empowers the ED to carry out arrests and raids and obtain records of incriminating statements.
If the ED should uncover a few more scandals similar to recent ones, there may be strong evidence to shut down India’s crypto industry – a long-term wish of the RBI.
It is important to note that there are a lot of talented Indians in the crypto space. Hence, a ban on crypto activities could force the skilled labor to other regions such as Dubai. Indian authorities, particularly the RBI, may want to take a cue from Thailand regarding crypto regulation.
Thailand’s crypto regulation established a role for its apex bank (Central Bank of Thailand, CBT) to protect crypto investors. The CBT is responsible for licensing virtual asset service providers in the country. With everything considered, the RBI still needs to change its stubborn stance on having a blanket ban on crypto activities.
Meanwhile, the Indian government is keen to take advantage of the growing crypto market at all costs. As one of the most populated countries in the world, its regulators want the best crypto services for its people. Moreover, rug pulls and other sophisticated scams have marred the crypto space.