Commerce Ministry: Govt doesn't keep track of crypto startups leaving India

22 Jul 2022 , 02:02 PM

The Ministry of Commerce and Industry informed Rajya Sabha on Friday that the government does not keep records on the departure of cryptocurrency companies from India.

The ministry responded when Rajya Sabha member Derek’O Brien asked if the government had noticed that crypto firms were leaving India, their specific reasons, and the effects on the country’s economy.

The Reserve Bank of India has warned users and dealers of virtual currencies that there are dangers associated with working with crypto startups on the levels of the economy, the law, client protection, and security.

The RBI also issued instructions to the firms directing them to maintain their Know Your Customer (KYC) procedures in accordance with legal requirements and expressed worry about the negative impact cryptocurrencies are having on the economy. In the response, it was said that because cryptocurrencies’ value is dependent on “speculations and promises of large returns that are not adequately rooted,” the economy will be made more unstable.

A significant problem in the market has been the exodus of cryptocurrency businesses from India, as both Web3 and cryptocurrency startups are leaving the nation for various reasons.

This week’s earlier, Nirmala Sitharaman, the finance minister, informed the legislature that the RBI had advised the government to impose controls and outright ban cryptocurrencies. The administration, however, appears to believe that any successful restriction or prohibition requires “global coordination.”

This occurs at a time when cryptocurrency exchanges are battling decreased volumes brought on by hefty taxes in addition to the unfavourable market conditions throughout the world.