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The recent Binance controversy has shed light on the security and reliability concerns surrounding global exchanges, particularly due to the increasing inclination of Indian crypto users towards these exchanges. Industry experts have emphasized the need for interventions by the Indian government to establish regulations for exchanges serving Indian users, while addressing the meticulousness of taxation related to trading in India.
Growing Concerns for Indian Crypto Users
Binance, the world’s largest cryptocurrency exchange, recently agreed to pay $4.3 billion to resolve money laundering allegations brought forth by the US Department of Justice. Founder Changpeng Zhao (CZ) admitted to the charges and resigned from his position.
The decline of global exchanges like FTX has raised concerns about potential losses for crypto investors, especially as Indian users increasingly turn to global platforms like Binance following the imposition of taxes on crypto transactions in India. While the Binance incident has not yet led to significant fund losses for Indian users, it has highlighted the need for robust user protection measures.
Industry Leaders Advocate for Regulatory Framework
The current scenario draws attention to the need for safeguarding crypto investors/users. Kashif Raza, co-founder of crypto news analysis platform Crypto Kanoon, made the following statement regarding the matter:
The Binance case has underscored the need for a regulatory framework similar to the regulations imposed on global banking and insurance companies entering the country, for global platforms seeking to interact with Indian users.
Dilip Chenoy, President of the Bharat Web3 Association, highlights the inequality between compliant Indian exchanges and foreign exchanges serving Indian users. He emphasizes the need for a regulatory framework similar to the norms for global banking and insurance companies entering India, urging the government to set boundaries for trading on foreign exchanges and provide clarity and protection for users.
Accountability and Trading Suitability of Global Exchanges
Vikram Subburaj, CEO of Indian crypto platform Giottus, states that such actors can harm the ecosystem and undermine the trust of crypto users in Indian exchanges.
Amidst this landscape, Sidharth Sogani, founder of crypto research firm CREBACO, suggests a reduction in trading meticulousness in India to encourage trading on Indian exchanges. Sogani proposes making trading in India more favorable instead of implementing compliance measures aimed at preventing capital outflow to global exchanges.
