India Impasse; Bitcoin Dips Amid Tax Requests; Some Domestic Exchanges Have Bank Accounts Frozen, Others Restricted
Reports emerged over the weekend – courtesy of Reuters – that the Indian government recently issued tax notices to tens of thousands of citizens involved in crypto trading, requesting them to declare their necessary amount of taxable income.
The sending of these notifications was prompted by a nationwide survey issued by the income tax department. They revealed that more than $3.5 billion worth of transactions had been initiated over a 17-month period .
The Indian Income Tax Department had previously made public their collaborative work with nine domestic crypto exchanges which was assisting in their identification of investors of virtual currencies – along with their transactional data, linked bank accounts, emails, and other appropriate date.
Commenting on the department’s decision to issue notices, even with the national government not yet having finalised any sort of cryptocurrency regulatory framework, was director general of investigations, B. R. Balakrishnan:
We cannot turn a blind eye. It would have been disastrous to wait until the final verdict was out on its legality.”
On Sunday, the prospects of cryptocurrency in India were bombarded yet again, this time via the banks. According to the The Economic Times, many national banks have recently been freezing – or restricting – the accounts of certain virtual currency exchanges.
These suspensions are being justified by the Indian banks which are doubtful toward the crypto market ever blossoming. With many exchanges operating on borrowed funds, the conservative approach appeared apt.
A near identical situation played out in Australia recently, where their leading crypto brokerage – CoinSpot – was subject to the freezing of their accounts by the nation’s largest banks for almost three weeks over the holiday period.
The price of Bitcoin (BTC) has dipped today by over 10 percent, largely due to the news out of India.
These fresh revelations out of India align with previous sentiment. In late November, Finance Minister Arun Jaitley publicly denounced the world’s most popular cryptocurrency stating that “the government’s position is clear, we don’t recognise this as legal currency.”
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