India one of the fastest growing economies in the world, recently experienced a huge growth in the number of cryptocurrency investors in the country. But on the other hand, the Government is still trying to formulate a law for regulating these investments, as the Tax Department in the country continues cracking down upon the cryptocurrency investors of the country.
Bitcoin and other cryptocurrencies are part of revolutionary “Blockchain Technology” where each and every transaction is distributed in a form decentralized ledger. The mode of transactions in cryptocurrency remains totally private, however one needs to use a bank account for trade in cryptocurrencies in India which makes them prone to being detected by Government agencies who are keeping constant vigil over cryptocurrency transactions in the country.
Recently, the IT Departments across India has summoned thousands of Bitcoin and other cryptocurrency traders in their respective cities, asking them to present details regarding their investments, their source of income for making these investments etc.
Earlier, while presenting this year’s budget the Union Finance Minister Mr. Arun Jaitley, clearly mentioned that the present NDA Government is firmly determined to curb out black money from the country. He also went on to say about the legality of cryptocurrencies in India where he mentioned that ” Use of cryptocurrencies for illicit activities is illegal and elements promoting these activities will be dealt with very strictly” which was heavily misinterpreted by the media and the entire cryptocurrency in India felt the heat within few minutes after making the announcement where Bitcoin(BTC) fell down to as low Rs 2,30,000/- after seeing a skyrocketing rise in it’s price.
But how does the IT Department track down these cryptocurrency traders?
Many people still believe that transactions in cryptocurrency are totally anonymous and can’t be tracked by any agency or bank. But for trading these virtual currencies one needs to have an account in a trading platform or cryptocurrency exchange.
Here in India, platforms like Zebpay, Koinex , Coinome, Coindelta etc facilitate the investors for dealing with cryptocurrencies. These exchanges require a lot of information in order to complete the KYC, and only when the details are verified a person can start his/her transactions. The Income Tax Department have access to these details and that’s how they track out the investors.
As of now, we can only sit back and wait for the Governments next move over the matter of cryptocurrency in India