India’s Finance Ministry is working on a regulatory framework for the rapidly expanding cryptocurrency market, according to Business Today India.
India, which has remained on the fence towards crypto assets, seems to be taking steps to regulate rather than ban cryptocurrencies. A ban on all cryptocurrencies – much like China just implemented – had been floated back in 2019, so this decision will be received positively.
The Indian cryptocurrency market has grown enormously in the last year. India is the largest cryptocurrency market in Central and Southern Asia and Oceania (CSAO) and has the second-highest crypto adoption rate in CSAO, behind only Vietnam.
One of the main concerns regulators have relates to initial coin offering (ICO) scams and rug pull scams. These involve people investing in a coin, but when the coin opens the money is taken and the website disappears.
This famously happened in recent weeks. A company named CryptoEats managed to scam investors out of approximately $500,000.
Discussing the threat of ICO scams to retail investors, a Finance Ministry official said that “what should not happen tomorrow is that if I start a personal digital currency, and after good marketing everybody buys it and once it has appreciated, I run away since I am a private player! Everybody has actually bought that currency by using other assets. Government needs to look at regulation in order to avoid the above”.