Abstract
Cryptocurrencies have sparked global transformations in digital technology and financial services, leading to deliberations on regulatory frameworks. India is cautiously working towards regulatory clarity and legalizing Cryptocurrency usage, as it becomes the country with the most cryptocurrency users. The Indian regulatory body is vigilant, monitoring progress and warning the public about associated risks. Despite regulatory efforts, India has seen a worrisome rise in cyber-frauds, cryptocurrency crimes, and money laundering involving digital currencies. This chapter focuses on the regulatory ambiguity in India, which inadvertently fosters an environment for crypto criminals. Through case studies, it highlights the gravity of the situation and the urgent need for legislative action to combat scams and money laundering. The author concludes optimistically, expecting India to establish robust crypto regulations to effectively address these challenges.
TopGlobal Cryptocurrency Regulations – A Siloed Approach
The last two decades are known for the birth and evolution of cryptocurrency and its impact on the banking and financial services sector. The way cryptocurrency has emerged and started disrupting the financial services ecosystem has been a focal point for a lot of governments and regulators across the globe. As per the information available in the public domain, there are more than 300 million people around the world who use or own cryptocurrencies in 2022. There are approximately 6000 different types of cryptocurrencies available with a market capitalization of USD 1.06 trillion (Tuwiner, 2023). The fact that there are close to 18000 business globally that accepts cryptocurrency payments evidences the wider acceptance of cryptocurrencies. India as a country is not immune to this development and has emerged as the country with the largest holder of cryptocurrencies in the world.
Key Terms in this Chapter
Cyber-fraud: Cyber fraud is the crime committed via a computer with the intent to corrupt another individual's personal and financial information stored online.
Tokenization: Tokenization is the process of replacing sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.
Non-Fungible Tokens (NFTs): Non-fungible tokens are unique cryptographic tokens. They are digital watermarks that can be used to establish provenance and ownership of many types of assets, from tweets to artwork and real estate.
Money Laundering: It a predicate offense and a crime that includes concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.
Virtual Currency: Virtual currency is a type of unregulated digital currency. It is not issued or controlled by a central bank. Examples of virtual currencies include Bitcoin, Litecoin, and XRP.
Crypto-crime: It is a crime that is an example of cybercrime related to theft (or the otherwise illegal acquisition) of cryptocurrencies and some of the methods or security vulnerabilities commonly exploited.
Cryptocurrency: A cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms.
Bitcoin: Bitcoin is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network.
Decentralized Finance (DeFi): Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies.
Decentralized Autonomous Organizations (DAOs): A decentralized autonomous organization (DAO) is an emerging form of legal structure that has no central governing body and whose members share a common goal to act in the best interest of the entity.