“Regulatory Compliance Is A Must, Not A Decision,” says Binance CEO As Malaysia, India, And Europe Strike Yet Again

“Regulatory Compliance Is A Must, Not A Decision,” says Binance CEO As Malaysia, India, And Europe Strike Yet Again

Malaysia’s SC has taken enforcement action against Binance, giving it 14 days to completely close its business while India’s AML agency is investigating the exchange’s role in betting apps. In Europe, Binance is winding down its futures and derivatives products offerings, starting with Germany, Italy, and the Netherlands.

Another day and another round of regulatory onslaught. Leading cryptocurrency exchange Binance can’t seem to take a break as a string of global regulators sends their warnings.

But CEO Changpeng Zhao is maintaining his composure as he works towards compliance, saying, “Sometimes, small setbacks are necessary for bigger long-term growth. Keep on building.”

“Regulatory compliance is a must, not a decision. And it leads to MORE market access and adoption, not less. Crypto adoption is probably around 2% now. Let’s go get the other 98% onboard,” tweeted CZ on Friday in response to this latest barrage of regulatory scrutiny.

Malaysia Takes Enforcement Action

To start with, Malaysia’s SC announced today that it is taking enforcement actions against Binance for illegally operating a Digital Asset Exchange (DAX) in the country. It reads,

“Under Sections 7(1) and 34(1) of the Capital Markets and Services Act 2007, all DAX operators must be registered as Recognized Market Operators (RMO) by the SC.”

Binance was first included in the regulators’ Investor Alert List in July 2020. Then a public reprimand was issued against Cayman Island registered Binance Holdings Ltc., its CEO CZ, and three other Binance entities registered in the UK, Lithuania, and Singapore for operating illegally.

Now, Binance Holdings, Binance Digital Limited, Binance UAB, and Binance Asia Services Pte Ltd, are ordered by the SC to disable their website and mobile applications within 14 business days of 26 July 2021 and cease all media and marketing activities. The SC said,

“Investors are advised to stop dealing with and investing through illegal DAX. Those who currently have accounts with Binance are strongly urged to cease trading through its platforms immediately and to withdraw all their investments immediately.”

Winding Down Derivatives Trading in Europe

Meanwhile, in Europe, Binance is shutting down derivatives and futures products offering across the Europe region, starting with Germany, Italy, and the Netherlands. The exchange said,

“With immediate effect, users from these countries will not be able to open new futures or derivatives products accounts. With effect from a later date to be announced in a further notice, users from these countries will have 90 days to close their open positions.”

The UK’s Financial Conduct Authority (FCA) has already cracked down on the exchange, with several banks restricting their services to the platform. Regulators in Germany have also previously raised concerns about Binance selling tokenized stocks.

Binance yielding to regulatory pressure started earlier this week when the exchange announced KYC compliance and reduced its daily withdrawal limit to 0.06 BTC for non-verified users.

India Investigating its Role in Betting Apps

As for India, the country’s anti-money laundering agency is examining if Binance Holdings had a role to play in an online investigation involving betting apps, reported Bloomberg citing people with knowledge of the matter.

The Enforcement Directorate reportedly summons Binance executives for questioning.

India has already been probing betting apps run by Chinese operators for allegedly laundering money through the cryptocurrency exchange WazirX, acquired by Binance in 2019. These betting apps collected more than 10 billion rupees ($134 million) over the past ten months.

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Author: AnTy

Crypto Exchanges Kraken, Bitfinex, and KuCoin Exploring India for Entry: Report

Crypto Exchanges Kraken, Bitfinex, and KuCoin Exploring India for Entry: Report

After cryptocurrency exchange, Binance, U.S.-based Kraken, Hong Kong-based Bitfinex, and rival KuCoin are actively exploring ways to set up in India, reported Reuters, citing people familiar with the matter.

Despite the uncertainty around the country’s regulatory stance on crypto, India has reportedly 15 million crypto investors in India, holding over 100 billion rupees ($1.37 billion).

Binance acquired the Indian crypto startup Wazirx in 2019, and Coinbase also announced plans for a back office in India. Now, these crypto exchanges are looking to enter a young nation of 1.35 billion people.

“These companies have already begun talks to understand the Indian market and the entry points better,” one source directly involved was quoted as saying.

While one exchange has already begun its due diligence for an Indian firm it was considering acquiring, the others were still in initial states and weighing their options. Founder of digital bank Cashaa, Kumar Gaurav, said,

“The Indian market is huge, and it is only starting to grow; if there was more policy certainty by now, Indian consumers would have been spoilt for choice in terms of exchanges because everyone wants to be here.”

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Author: AnTy

State Bank of India Joins JPMorgan’s Ethereum-Forked Blockchain Payment Network, Liink

State Bank of India Joins JPMorgan’s Ethereum-Forked Blockchain Payment Network, Liink

State Bank of India (SBI), the largest bank in India, has announced a partnership with US bank JPMorgan to use its blockchain-based technology to enhance international transactions.

The government-owned bank explained that the partnership would help reduce transaction costs and time to execute customers’ payments. The bank stated that it would take hours to execute international payments and not the usual two weeks. The bank also stated that beneficiaries will now get their payments faster as it will involve fewer steps.

Venkat Nageswar, SBI deputy managing director, explained that the bank has been undertaking various digital transformations in the recent past and is keen to add more to enhance their daily operations. Nageswar told India’s Economic Times,

“We are excited to be the first bank in India to go live on the network and look forward to a closer partnership with JP Morgan on implementation and exploring applications as part of the network to better serve our clients.”

JPMorgan’s blockchain-based network, dubbed Liink, is a decentralized network where numerous financial firms, fintech firms, and other corporations can subscribe. The network enables the users to conduct secure and peer-to-peer data interchanges at fast speeds. It was started in 2017 being dubbed Interbank Information Network, but it rebranded to Liink in October last year.

Currently, over 400 financial-based institutions and corporates have subscribed to Liink from 78 nations. The enlisted firms include 27 of the globe’s top-ranking 50 banks. The network boasts of about 100 live banks consisting of private and government-owned institutions.

JPMorgan Chase India managing director, Prabdev Singh, explained that the recent deal with SBI is in tandem with its program to enhance its blockchain presence within India and the region. Singh stated that the firm is continually exploring how the new technologies can change customers’ experiences positively.

Apart from changing its name to Liink, JPMorgan also rolled out its own stablecoin dubbed JPM Coin last year. The stablecoin was launched to enhance international payments.

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Author: Joseph Kibe

Rise in Digital Payments has India Exploring the Potential of Digital Rupee

Rise in Digital Payments has India Exploring the Potential of Digital Rupee

While India has had an often adversarial, murky attitude towards digital assets and cryptocurrencies, the Reserve Bank of India is currently contemplating whether there is a need for a digital version of its sovereign currency, the Rupee. Along with creating a crypto-based iteration of it, the RBI is also hypothesizing how best to operationalize it.

According to a booklet that was recently published by the RBI, this news covers the journey and evolution of payment and settlements systems in India from 2010-20. The Central Bank stated within its booklet,

“Private digital currencies (PDCs) / virtual currencies (VCs) / cryptocurrencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks.”

“Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it.”

This conversation regarding the value of a digital version of India’s fiat stems from the rapid increase in digital payments; which are expected to increase threefold in the coming years. Even so, the RBI must contend with a considerable amount of skepticism, even hostility, towards cryptocurrencies from local regulators.

India’s Love-Hate Relationship with Crypto

India’s relationship with cryptocurrencies is a matter of common knowledge, having been opposed to their use for some time now. April 2018, for example, India joined China as the former’s RBI imposed a blanket ban on cryptocurrency transactions, which was only overturned in March 2020.

Though, India finds itself being the latest among a growing group of countries considering and testing CBDCs. The likes of Sweden and China having already tested their e-Kroner and digital yuan, respectively. The European Union and the U.S. are also getting work underway for a crypto-iteration of their fiat currencies.

Even so, RBI’s Governor, Shaktikanta Das has previously cooled the metaphorical jets of crypto enthusiasts; having commented in December 2019 that discussions were at an incredibly early stage.

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Author: James Fox

Indian Government Looks to Ban Cryptocurrency Trading With New Law

India is not new when it comes to harsh and unfriendly cryptocurrency laws. Now, Bloomberg reports that the country is set to introduce a new law which will ban cryptocurrency trading within its borders.

Citing anonymous sources, the report states that India’s federal cabinet is set to discuss the bill prior to being sent to the parliament.

The report states that the Indian government will continue encouraging and supporting the growth of blockchain technology but will discourage crypto trading.

In 2018, Indian central bank instituted a ban on all crypto transactions following numerous cases of frauds prior to the sudden decision to ban about 80% of the country’s currency by Prime Minister Narendra Modi. However, the decision was rescinded in March this year after a successful filing of a suit in the Supreme Court by various crypto-based firms operating in the country.

The lifting of the ban saw almost a 450% increase in crypto trading in just two months from March. Paxful, a Bitcoin marketplace, registered a staggering 883% growth from January to May this year representing a growth from $2.2 million to about $22.1 million in revenues. Similarly, India’s largest crypto exchange WazirX registered a growth of 400% and 270% in March and April respectively.

The renewed effort to ban crypto trading comes at a time when the Indian Parliament has reopened following a prolonged break due to COVID-19 pandemic. The bill is likely to be introduced to parliament in this monsoon session which kicked off yesterday and is set to affect over 1.7 million Indians who actively trade in digital assets as well as institutions coming up with platforms to ease crypto trading.

Today’s report appears to be in tandem with June’s news where the nation’s finance ministry was reportedly urging for inter-ministerial consultations on how to ban crypto.

In the recent past, India’s federal government has been exploring possible ways of using blockchain technology to enhance service delivery in different sectors like management of land records, enhancement of pharmaceutical drugs supply chains, management of educational certificates, among others but remains adamant against crypto trading.

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Author: Joseph Kibe

India’s Largest Crypto Exchange WazirX Partners With Matic Network To Develop A DeFi Product

  • The largest crypto exchange firm in India, WazirX which is based in Mumbai, has announced it has partnered with Matic Network to develop a DeFi product.
  • WazirX revealed that it will launch an automated market maker which is a DeFi protocol on top of Matic Network.

WazirX, which is owned by Binance, is set to introduce an AMM DEX which will allow users to easily swap crypto assets in a decentralized way and at the same time earn fees through provision of liquidity.

In a blog post, WazirX explained that it chose to develop the AMM DEX on Matic Network so as to bypass the performance bottlenecks within the DeFi space through high-speed as well as low-fee infrastructure.

The partnership was inspired by the recent growth in trading volumes of AMM-based DEXs such as Uniswap. DEXs allow running of openly accessible chain liquidity pools for various tokens. WazirX explained:

“The DeFi movement has picked up globally and WazirX plans to make it easy for billions of Indians to participate in the DeFi ecosystem.”

However, the Mumbai-based exchange has chosen Matic rather than Ethereum which is at the moment the market leader in the DeFi sector. WazirX CEO, Nischal Shetty, explained that high transaction fees as well as scalability within the Ethereum network were the main aspects that led the firm to choose Matic.

Indeed, high transaction costs within the Ethereum network have been a concern which have increased by over 3,000% annually rising to over $6. Matic network charges relatively low costs which averages at $4.

Binance, the largest crypto exchange firm in the world, acquired WazirX last year to expand its global presence in India. AMM’s testnet is set to be launched in September.

According to Shetty, the DeFi project is purely WazirX’s project adding that they were appreciative of Binance’s support.

Crypto trading volumes have risen in India following the Supreme Court’s lifting of the crypto transactions ban by the Reserve Bank of India in March and analysts see India as one of the most promising crypto markets in the world.

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Author: Joseph Kibe

Ripple Submits A Policy Framework To Guide Indian Lawmakers In Regulating Digital Assets

  • The lack of robust laws or policies to guide the growth of crypto in India leaves enthusiasts with frightening thought of the Parliament probably taking steps towards banning crypto altogether.
  • In a bid to prevent this, American startup, Ripple, and largest custodian of XRP released a policy paper to guide digital assets legislation in the country.

India’s blockchain and digital assets industry is currently in limbo as the uncertainty rises from the country’s regulators’ view on crypto assets. Despite the Supreme Court of India ruling in favor of lifting the “unconstitutional” draconian ban on crypto by the Reserve Bank of India (RBI), the authorities are yet to draft a legal document regulating digital asset ecosystems.

“The Path Forward for Digital Assets Adoption in India”

The paper (titled as above) proposes short and medium-term policy frameworks to lawmakers in India in a bid to boost the overall development of blockchain and digital asset solutions in the country. The paper is filled with Ripple settlement networks and XRP advertisements but still offers a clear path on India coming into the global play in regulating the digital asset taxonomy.

In a statement on the release of the policy framework Sagar Sarbhai, Ripple’s Head of Government & Regulatory Affairs in the APAC region said:

“India is currently presented with an opportunity to develop a regulatory framework for a native digital assets ecosystem. We are optimistic about that after careful deliberation and consultation with industry participants.”

The draft submitted to the Indian legislation employs a “technology-agnostic, principles-based, and risk-adjusted” framework to provide a crisp and clear guidance structure in India.

Short and Medium-Term Plans

Ripple’s paper also offered short and medium-term plans for the Indian legislators, including attracting talent to the Gujarat International Finance Tec-City (GIFT) by drafting a short term digital asset framework for service providers.

The proposal focuses on the development of enterprise use cases for digital assets such as XRP. The paper further touted XRP’s potential in solving the cross border settlement problems across the region.

Furthermore, the paper also calls for the removal of digital assets, cryptocurrencies, and services arising from the “negative listing” in the RBI fintech regulatory sandbox framework. This allows developers the needed freedom to innovate and test their networks within a safe, regulated space. Navin Gupta, Ripple’s managing director in Asia, said:

“Under a clear regulatory framework, individuals and businesses can confidently take full advantage of and operate within a safe environment that encourages the use of innovative technology.”

The digital asset field in India is begging for a regulated platform with exchanges in the country recently approaching the central bank regarding taxation clarity.

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Author: Lujan Odera

MoneyGram to Offer Direct Deposits in India Via Federal Bank; Both Members of RippleNet

MoneyGram will now offer direct deposits to India following its partnership with Federal Bank, one of the leading financial institutions in the country. According to a recent announcement by the payment system service provider, this alliance will be strategic in offering its Indian clients an account credit option via the Federal Bank. The MoneyGram announcement reads,

“Through this partnership, millions will be able to receive deposits directly in their bank accounts without leaving the confines of their homes which is imperative in the current situation.”

As highlighted, this milestone is expected to further assist in COVID-19 mitigation following the ‘new normal’. Most economies have moved towards e-payment networks in a bid to keep the virus at bay. Given this situation, the alliance between MoneyGram and Federal Bank is especially important.

Furthermore, World bank stats indicate that India continues to dominate the global remittance market with 2019 recording over $82 billion. Notably, Federal bank enjoys 15% of this market and is therefore expected to significantly boost the partnership. MoneyGram’s Chief Revenue Officer, Grant Lines, echoed that they are confident of the value proposition by Federal Bank,

“Federal Bank is known throughout India as a pioneer in digitizing financial services, and we’re proud to partner with them to enable millions of people the option to receive money directly into their bank account.”

MoneyGram’s Venture in Ripple for International Remittances

Ripple, popularly known for its remittances service based on RippleNet, had already began working with MoneyGram. The two got into a partnership back in June 2019 which spiked hopes of MoneyGram leveraging a blockchain based platform for its payment services. This is, however, yet to happen despite the market adrenaline at the time.

In a recent Q1 earnings call, the CEO of MoneGram, Alexander Holmes, said that the quarter had been quite slow for the partnership. Nonetheless, they have some work in progress and boasted of the future prospects,

“We also have a variety of new services in the pipeline and things that we’ll be rolling out, and expanding with later this year…. But from a capability perspective from a service quality and from a performance, it’s been a really good — been a really good quarter.”

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Author: Edwin Munyui

India’s National Blockchain Strategy Draft Calls On RBI To Release A Central Bank Digital INR

The National Institute for Smart Governance (NISG), a non-profit body launched by the government of India, releases its draft strategy on blockchain and cryptocurrencies. According to the official draft, the government of India should work towards releasing a central bank digital currency (CBDC), and a governing body to regulate the blockchain industry.

NISG drafts blockchain industry regulation policies

The committee chartered by the National e-Governance Division (NeGD), under the ministry of electronics and information technology (MeitY), provided a clear policy framework for the governance and development of crypto products across India. The draft states India’s ambitions to become a world leader in tech, and digitalization is heavily impacted by the adoption of blockchain.

The report focuses on regulatory authorities in the country taking a bolder step towards setting the laws governing the blockchain field. It further discourages the continued issuing of public statements in place of having a solid regulatory framework to fall back onto. The draft states,

“Public statements, whether through the press or formal speeches, are helpful but are not official statements of application by the agency. If an agency intends to enforce its laws in new and innovative ways, it must first notify industry stakeholders of its intent to do so and the way in which existing law applies.”

Draft proposes a digital currency to replace the rupee

According to the draft, the NISG proposed a digital central bank currency similar to the rupee, offered by the government, in conjunction with the Reserve Bank of India (RBI). The digital currency is to be built on a public blockchain similar to Bitcoin and Ethereum, allowing other dApps to run on top of it. The official statement reads,

“It is strongly recommended that Government of India along with RBI come out with a Central Bank Digital INR (CBDR) administered over a Public Permissioned Blockchain that processes transactions through a Turing Complete Virtual Machine allowing decentralized applications to run on its platform.”

An extended run for blockchain in India

India securities regulator recently urged the public and private sector to explore blockchain activities for the efficient trading and storage of digital securities market. Furthermore, the widely spread FUD on India banning cryptocurrencies has been debunked by the RBI, which only ringfenced the regulated entities from offering cryptocurrency services.

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Author: Lujan Odera

India’s Supreme Court Continues To Hear Case Against RBI Cryptocurrency Ban

The Reserve Bank of India had issued a circular in April 2018, which imposed a banking ban on crypto service providers. The circular prohibited banks from offering their service to all crypto-related service operators in the country. The banking ban was then challenged by the Internet and Mobile Association of India (IAMAI) in the supreme court whose hearing has been going on for over a year now.

In the latest hearing which began on the 14th of January, the judges asked both the counsels to start the arguments fresh and from the beginning. The three-day proceedings saw the prosecution side explaining to the bench judges that the banking ban imposed by RBI was not under their jurisdictions.

The prosecution was headed by Mr Ashim Sood who noted that the RBI circular was bad mainly for three reasons,

  • Malice in law. RBI doesn’t have the power to ban but acted to ban Crypto on effect.
  • Colourable exercise
  • Ultra Vires – without authority.

Mr. Sood also pointed out the flawed analysis by RBI which in its circular claimed that since crypto assets are volatile and risky, it should not be allowed to be regulated. Sood explained that the same risk is involved in stock trading also and effectively lies under the domain of Security and Exchange Board of India (SEBI).

Mr. Sood also clarified that nobody wants to make cryptocurrency as a legal tender which has been a strong defence against legalizing cryptocurrencies. Mr. Sood explained that these digital assets can be used as a medium of exchange and store of value. He explained,

“Some people would find value in it and some people would exchange it. It is a technology which should be given free play. Casino chips are useful to the people who are inside the casino […] When I come out of [a] casino, its use ceases to exist but then some people may exchange it and it holds a value for the interested people. So likewise there is no obligation to use VCs [virtual currencies] as a medium of exchange.”

The current court proceedings in the RBI vs IAMAI is being seen as one of the most fruitful proceedings in the case which has been going on for over a year now. However, given the state of Indian judiciary it won’t be a big surprise if the case takes longer than what many had anticipated.

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Author: Rebecca Asseh