Indian crypto start-ups, bitcoin stacking services, and wallet management software claim to have systems and protocols in place to ensure that their users never experience an incident similar to FTX. Investors are concerned about the transparency, security, and internal controls used by cryptocurrency firms as the FTX saga continues.
One of the top crypto start-up platforms claims that before it went down, FTX was trading with client money, and its closure had an impact on around 1 million customers. Due to exchanges' control over users' private keys, control over consumer assets has become a critical cryptocurrency concern. After making a purchase, the customer keeps the coins and tokens in their wallet, which is stored on the exchange. What if a major cryptocurrency exchange or any other business handling the money of crypto investors experiences something similar to the FTX-like saga in India? Investors receiving their money back is difficult.
This is because there are currently no rules governing the cryptocurrency business. Major banks avoid doing business with cryptocurrency exchanges out of fear of the authorities. Although it has started taxing gains from cryptocurrency transactions, the government has not yet released any regulations about cryptocurrencies.
There are several cautionary indications. The majority of cryptocurrency exchanges operating in India have risk disclosures about the absence of regulatory status for cryptocurrencies in India on their websites.
The largest cryptocurrency exchange in India, Wazirx, for instance, states on its website that "They (cryptocurrencies) are currently uncontrolled; India does not have a legislative framework in place to oversee its functioning."
Likewise, Coindcx, another well-known cryptocurrency exchange, states on its website that NFTs and crypto goods are unregulated and can be quite dangerous. The statement states that "there may be no regulatory redress for any damage from such trades."
Another well-known cryptocurrency exchange, Unocoin, states on its website that "Cryptoassets are not monitored or backed by any regulatory body, government or otherwise in India."
However, thousands of investors, particularly young people, risk their money on these assets in the hopes of receiving high returns.
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