Shalini Nagarajan

<div id="highlights-block_62f245d57c753" class="highlights">
 <ul>
 <li>On-chain fund transfers will still work between Binance and WazirX</li>
 <li>Binance CEO Changpeng Zhao said the WazirX acquisition was never finalized</li>
 </ul>
 
</div>



Binance is further disengaging from <a href="https://cms.blockworks.co/tag/wazirx/" target="_blank" rel="noreferrer noopener">Indian cryptocurrency exchange WazirX</a>, with off-chain fund transfers between the two platforms set to be scratched.



The move to remove the transfer channel via the “Login with Binance” option will be effective from August 11, according to a <a href="https://www.binance.com/en/support/announcement/f9fd6936e5264206a71c898f8a36f29e" target="_blank" rel="noreferrer noopener">blog</a> posted on Monday. Off-chain transfers occur outside of a blockchain network and facilitate instant payouts, as opposed to slower on-chain transactions.



Binance said its decision to disable such transactions is a result of recent regulatory action against WazirX operator Zanmai Labs over allegations of facilitating money laundering on the exchange.



<blockquote class="wp-block-quote">“It has come to our attention that some users were given to believe that funds deposited in WazirX were managed by Binance,” the company said in the blog. “This is not the case.”</blockquote>



On-chain fund transfers will remain available between the two platforms.



Binance has been publicly <a href="https://cms.blockworks.co/binance-distances-itself-from-indias-crypto-exchange-wazirx/" target="_blank" rel="noreferrer noopener">disassociating</a> itself from WazirX in recent days after Indian regulators froze $8.1 million in funds belonging to the local exchange. It is one of the most prominent firms in the Indian crypto industry, counting <a href="https://www.businesstoday.in/crypto/story/15-million-crypto-users-left-in-limbo-as-binance-wazirx-feud-continues-344044-2022-08-08">15 million</a> users as of August.



As part of a wider probe into Indian fintechs, the Enforcement Directorate <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PR%20HYZO_Freezing%20of%20assets%20of%20WazirX%20Crypto%20Exchange.pdf" target="_blank" rel="noreferrer noopener">claimed</a> a significant amount of funds were diverted from WazirX to unknown foreign wallets and that the exchange didn’t cooperate with the agency.



Following the regulatory woes, a public spat broke out between Binance CEO Changpeng Zhao and WazirX co-founder Nischal Shetty.



<h3 class="wp-block-heading">Who&#8217;s responsible for WazirX?</h3>



In 2019, Binance <a href="https://www.binance.com/en/blog/all/binance-acquires-indias-leading-digital-asset-platform-wazirx-to-launch-multiple-fiattocrypto-gateways-404105749895733248" target="_blank" rel="noreferrer noopener">announced a deal</a> to acquire WazirX — a widely-celebrated move for the Indian crypto ecosystem at the time. But Zhao <a href="https://twitter.com/cz_binance/status/1555578417973792769?s=20&amp;t=RMyL5Z3l4L0o0NKRIuZWgA" target="_blank" rel="noreferrer noopener">said</a> his company never finalized the deal to acquire the exchange and Binance only provides wallet solutions for it. 



Shetty rebuffed that claim, saying Binance did acquire WazirX and it licensed Zanmai Labs to operate rupee-based crypto pairs on the exchange.



Patrick Hillmann, chief communications officer at Binance, compared the situation to a car owner having sold their vehicle but refusing to hand over their keys.



“Shetty told us, ‘We have given you access to our AWS pass keys,’ but that’s not what we meant by ownership. The operations, marketing, how users are KYCed, actual database of the users were all kept, owned and run by WazirX,” Hillmann <a href="https://www.moneycontrol.com/news/business/cryptocurrency/binance-wazirx-spat-opaque-ownership-a-hazy-acquisition-deal-and-off-chain-transactions-8985281.html" target="_blank" rel="noreferrer noopener">reportedly</a> told CNBC-TV18.



“Now, the ED has asked them [WazirX] for information on what they used the car for and now they are throwing up their hands, saying Binance owns the title,” he said.



Binance has said it will support Indian regulators in their investigations relating to WazirX.



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Binance Curtails Ties to WazirX Following Regulatory Probe

Sebastian Sinclair

<div id="highlights-block_62f0633984372" class="highlights">
 <ul>
 <li>Binance chief Changpeng Zhao said his firm never completed a transaction to acquire major Indian exchange WazirX in 2019</li>
 <li>WazirX&#8217;s co-founder Nischal Shetty has disputed those claims and said Binance operates crypto-to-crypto pairs and processes digital asset withdrawals</li>
 </ul>
 
</div>



Binance CEO Changpang Zhao said Friday his firm never finalized a deal to acquire Indian crypto exchange WazirX, days after the platform was accused of evading oversight by local agencies.



In a tweet <a href="https://twitter.com/cz_binance/status/1555578417973792769?s=20&amp;t=RMyL5Z3l4L0o0NKRIuZWgA" target="_blank" rel="noreferrer noopener">thread</a>, Zhao said the November 2019 deal &#8220;was never completed&#8221; and Binance only provides &#8220;wallet services for WazirX as a tech solution.&#8221;



&#8220;Binance has never — at any point — owned any shares of Zanmai Labs, the entity operating WazirX,&#8221; Zhao wrote. &#8220;WazirX is responsible [for] all other aspects of the WazirX exchange, including user sign-up, [know-your-customer solutions], trading and initiating withdrawals.&#8221;



That&#8217;s despite the deal, at the time, having been made <a href="https://support.wazirx.com/hc/en-us/articles/360039273693-WazirX-Gets-Successfully-Acquired-By-Binance" target="_blank" rel="noreferrer noopener">public</a> by both <a href="https://www.binance.com/en/blog/all/binance-acquires-indias-leading-digital-asset-platform-wazirx-to-launch-multiple-fiattocrypto-gateways-404105749895733248" target="_blank" rel="noreferrer noopener">Binance</a> and WazirX, which purported to allow users to buy and sell crypto with Indian rupees (INR) via the Binance Fiat Gateway.



WazirX&#8217;s co-founder Nischal Shetty has disputed Zhao&#8217;s claims, in what&#8217;s now a tit-for-tat online feud between the exchange execs.



&#8220;WazirX was acquired by Binance,&#8221; <a href="https://twitter.com/NischalShetty/status/1555602963430785024?s=20&amp;t=Cyfvv8NkIW4dQORfEPEgAA" target="_blank" rel="noreferrer noopener">Shetty tweeted</a>, less than two hours after Zhao had publicly distanced Binance from the exchange. &#8220;Binance operates crypto to crypto pairs, processes crypto withdrawal[s].&#8221;



<h3 class="wp-block-heading">Binance and WazirX ties examined by Indian regulators</h3>



WazirX has drawn the ire of the Directorate of Enforcement (ED), the country&#8217;s financial watchdog, over allegations Zanmai Labs facilitated money laundering on the exchange. 



The exchange touts itself as the country&#8217;s &#8220;largest&#8221; crypto exchange with 31.7 million users, about eight million behind another major Indian exchange, CoinDCX&#8217;s, which recorded 40 million overall in March. 



Binance, the country&#8217;s fourth-largest exchange, garners roughly 27.6 million users, according to <a href="https://www.businessinsider.in/cryptocurrency/news/around-90-million-users-flocked-to-crypto-bandwagon-in-march-2022-report/articleshow/92081565.cms#:~:text=As%20per%20Comscrore's%20report%2C%20CoinDCX,and%2030.1%20million%20users%20respectively." target="_blank" rel="noreferrer noopener">Business Insider India</a>.



A recent ED <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PR%20HYZO_Freezing%20of%20assets%20of%20WazirX%20Crypto%20Exchange.pdf" target="_blank" rel="noreferrer noopener">investigation</a> has claimed large amounts of funds were diverted from questionable, non-bank financial institutions and their fintech partners to WazirX, which were then laundered abroad.



Domestic Indian publication <a href="https://www.business-standard.com/article/markets/ed-serves-fema-notice-to-cryptocurrency-exchange-wazirx-minister-122080301365_1.html" target="_blank" rel="noreferrer noopener">Business Standard</a> first reported on the investigation.



Regulators have accused Zanmai Labs of creating a &#8220;web of agreements&#8221; with social media management tool Crowdfire, also founded by Shetty, alongside Singapore holding company Zettai and Binance&#8217;s Cayman Islands entity. This was meant to obscure ownership of WarzirX, according to a <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PR%20HYZO_Freezing%20of%20assets%20of%20WazirX%20Crypto%20Exchange.pdf" target="_blank" rel="noreferrer noopener">statement</a> Friday.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">2/ You can check this fact by going to the TOS of WazirX More facts about WazirX: • Binance owns WazirX domain name • Binance has root access of AWS servers • Binance has all the Crypto assets • Binance has all the Crypto profits Don’t confuse Zanmai and WazirX&mdash; Nischal (Shardeum) ⚡️ (@NischalShetty) <a href="https://twitter.com/NischalShetty/status/1555602967813816320?ref_src=twsrc%5Etfw">August 5, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The ED has issued a freeze on Zanmai director Sameer Mhatre&#8217;s bank balances worth INR 646,700,000 ($8.1 million) over an alleged failure to cooperate with the agency.



Shetty previously claimed WazirX controls all crypto-crypto and INR-based crypto transactions with only intellectual property and preferential agreement with Binance. 



Zanmai Labs now claims it is only involved in INR-based crypto transactions where all other trades are handled by Binance on WarzirX, the agency said in its statement.



WazirX is accused of giving &#8220;contradictory and ambiguous&#8221; answers to &#8220;evade&#8221; regulatory oversight from Indian authorities.



&#8220;Recent allegations about the operation of WazirX and how the platform is managed by Zanmai Labs are of deep concern to Binance,&#8221; Zhao said. &#8220;Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.&#8221;



WazirX and a spokesperson for Zhao did not immediately return a request for comment.



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Binance Distances Itself From India’s Crypto Exchange WazirX

<div id="highlights-block_62c41f60368f0" class="highlights">
 <ul>
 <li>Local investors shouldn’t move to foreign crypto exchanges to skirt local taxes, WazirX’s CEO said</li>
 <li>Companies dependent on transaction fees could revise revenue forecasts, a crypto exec told Blockworks</li>
 </ul>
 
</div>



Trading volumes on Indian crypto exchanges plummeted after a <a href="https://cms.blockworks.co/india-clarifies-crypto-taxes-as-trading-volumes-crater/" target="_blank" rel="noreferrer noopener">contentious tax policy</a> came into effect on Friday.



Top exchanges including <a href="https://www.coingecko.com/en/exchanges/wazirx#statistics" target="_blank" rel="noreferrer noopener">WazirX</a>, <a href="https://www.coingecko.com/en/exchanges/zebpay#statistics" target="_blank" rel="noreferrer noopener">ZebPay</a>, <a href="https://www.coingecko.com/en/exchanges/coindcx#statistics" target="_blank" rel="noreferrer noopener">CoinDCX</a> and <a href="https://www.coingecko.com/en/exchanges/bitbns#statistics" target="_blank" rel="noreferrer noopener">BitBNS</a> saw volumes drop between 10% to as much as 70% in the last week, according to data from CoinGecko. 



CoinDCX saw the biggest nosedive, with volumes down from roughly $6 million on June 28 to just about $2 million on Tuesday — a 70% drop. WazirX’s trading volumes fell by a similar level, while BitBNS and ZebPay had relatively smaller decreases.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Indian Crypto exchange&#39;s trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable. Based on current volumes &#8211; Exchanges are only able to generate trading fee revenue of $1000 to $3000 Max. Bitbns seems to be still doing well. Tough times ahead. <a href="https://t.co/KNDbea9BCn">pic.twitter.com/KNDbea9BCn</a>&mdash; Crypto India 🔑 (@CryptooIndia) <a href="https://twitter.com/CryptooIndia/status/1543884371395891206?ref_src=twsrc%5Etfw">July 4, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The fall in volumes cannot entirely be attributed to India’s crypto tax laws taking effect. A combination of falling cryptoasset prices, liquidations and financial struggles of key crypto players, soaring inflation and the anticipation of a recession have all resulted in the current “crypto winter.”



Even so, crypto executives in India had warned the central authority’s decision to impose a 1% tax deducted at source (TDS), above a flat 30% tax on crypto profits, would discourage investors from trading in digital assets.



Nischal Shetty, CEO of WazirX, said on <a href="https://twitter.com/NischalShetty/status/1543939846879707136" target="_blank" rel="noreferrer noopener">Twitter</a> that investors in India shouldn’t be flocking to foreign crypto exchanges as a way to sidestep local tax laws. “There has been misinformation spread by some that trading on foreign exchange does not attract TDS. That is incorrect,” he said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1/Something important for Indian crypto traders to understand • Trading on foreign exchanges that don’t deduct TDS would mean YOU have to pay TDS directly to Income Tax Department • You need to know PAN of the seller on international exchanges • May be asked to pay 20%…&mdash; Nischal (Shardeum) ⚡️ (@NischalShetty) <a href="https://twitter.com/NischalShetty/status/1543939846879707136?ref_src=twsrc%5Etfw">July 4, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Further, investors shouldn’t expect the 1% TDS to be altered this year, according to Khaleelulla Baig, co-founder of Singapore-based KoinBasket.



<blockquote class="wp-block-quote">“It’s important that the government should soon look at revising the guidelines to encourage entrepreneurship in the Web3 sphere,” he said in an email.</blockquote>



Before the 1% TDS kicked, CoinSwitch CEO Ashish Singhal told Blockworks cryptocurrencies should be taxed at par with equity markets.



“The crypto market is driven by high-frequency traders, like intraday traders in equity markets. These traders operate on extremely thin margins, and locking up their capital with high TDS will restrict their ability to operate,” he said.



Sinking trading volumes could have a direct impact on the revenue streams of these companies, possibly prompting them to lay off workers in an industry already grappling with <a href="https://cms.blockworks.co/crypto-industry-layoffs-may-have-unintended-consequences/" target="_blank" rel="noreferrer noopener">high employee turnover</a>. 



“Transaction volume in the crypto space has collapsed,” Manuel Ortiz-Olave, co-founder of equity tokens business Brickken, told Blockworks via Telegram. “This implies that companies dependent on transaction fees (i.e. exchanges and similar) will see a major revision of revenue forecasts, which will drive cost restructuring decisions.”



Companies building on top of blockchain technology-providing services, that aren’t intrinsically linked to the performance of cryptocurrencies, will do better in comparison, he added.



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Indian Crypto Trading Volumes Plunge as New Tax Rules Kick In

Bessie Liu

<div id="highlights-block_62bcbc8b6d6e0" class="highlights">
 <ul>
 <li>“A favorable tax regime, supportive legislation, access to capital and a wealth of talent makes Dubai the Web3 hotspot of the future,” a crypto exec told Blockworks</li>
 <li>“India has battled brain drain for decades,” CoinSwitch’s CEO said</li>
 </ul>
 
</div>



India’s <a href="https://cms.blockworks.co/india-clarifies-crypto-taxes-as-trading-volumes-crater/" target="_blank" rel="noreferrer noopener">daunting cryptocurrency taxation</a> policies and seemingly complex treatment of digital assets are pushing local exchanges to Dubai and Singapore.



The nation recently announced a <a href="https://cms.blockworks.co/indias-crypto-tax-takes-effect-with-industry-fearing-it-will-stifle-growth/" target="_blank" rel="noreferrer noopener">1% tax deducted at source</a> (TDS) — meaning crypto users must pay 1% tax on any transaction — on top of a controversial <a href="https://cms.blockworks.co/indias-crypto-tax-takes-effect-with-industry-fearing-it-will-stifle-growth/" target="_blank" rel="noreferrer noopener">30% tax</a> on investment profits.



India’s 30% tax law, which came into effect on April 1, triggered trade volumes at four regional crypto exchanges — WazirX, ZebPay, CoinDCK and BitBns — to immediately <a href="https://www.coindesk.com/business/2022/04/11/crypto-trading-volumes-in-india-collapse-10-days-after-new-taxes-crebaco" target="_blank" rel="noreferrer noopener">crash</a> as much as 72%.



Moves like these have led to India’s central bank being labeled “hostile” to the cryptocurrency sector. Its governor Shaktikanta Das has <a href="https://www.moneycontrol.com/news/business/rbi-governor-interview-citing-crypto-crash-shaktikanta-das-says-rbi-has-been-rightly-cautioning-investors-8559491.html" target="_blank" rel="noreferrer noopener">cautioned against cryptocurrencies</a> and claimed they hold no underlying value.&nbsp;



Nischal Shetty and Siddharth Menon, co-founders of WazirX, have now reportedly shifted operations to Dubai, although they still plan on doing business out of Mumbai.&nbsp;



The Binance Labs-backed exchange told <a href="https://www.businesstoday.in/crypto/story/exclusive-wazirx-ceo-nischal-shetty-co-founder-siddharth-menon-shift-base-to-dubai-330395-2022-04-19" target="_blank" rel="noreferrer noopener">Business Today</a> it is a remote-first organization with employees in over 70 locations. Sameer Mhatre, the third co-founder, continues to head the exchange in India.



Coinbase Ventures-backed Vauld, which recently <a href="https://cms.blockworks.co/coinbase-backed-vauld-cuts-workforce-by-30-seeks-to-halve-exec-pay/" target="_blank" rel="noreferrer noopener">cut</a> its workforce by 30%, shifted its headquarters to Singapore in 2018 alongside ZebPay. CoinDCX is also registered there under the legal name Primestack Pte. Ltd.



“India has battled brain drain for decades. This is a generational opportunity to reset the odds in our favor,” said Ashish Singhal, co-founder and CEO of Bangalore-based CoinSwitch.



CoinSwitch itself isn’t being enticed to move operations away from the country. “We want to play an active role in shaping the Web3 ecosystem in India,” he said.



<blockquote class="wp-block-quote">“Examples from the US and other matured economies show institutional investors are ready to put capital in crypto markets if there is more regulatory clarity.”</blockquote>



While the new taxation in India appears restrictive and discouraging to investors, Dubai has a <a href="https://news.bitcoin.com/dubai-launching-crypto-valley-tax-free-zone/" target="_blank" rel="noreferrer noopener">full exemption</a> on cryptocurrency taxes — similar to its <a href="https://tradingeconomics.com/united-arab-emirates/personal-income-tax-rate#:~:text=The%20Personal%20Income%20Tax%20Rate,source%3A%20Ministry%20of%20Finance" target="_blank" rel="noreferrer noopener">treatment</a> of personal income.&nbsp;



The emirate’s crypto regulator, the Virtual Assets Regulatory Authority, began handing out crypto exchange licenses in March, and two months later Dubai announced its <a href="https://dlp.dubai.gov.ae/Legislation%20Reference/2022/Law%20No.%20(4)%20of%202022%20Regulating%20Virtual%20Assets.html" target="_blank" rel="noreferrer noopener">first law</a> regulating digital assets.



“There’s a unified regulator workflow, which synthesizes the regulations and creates a beacon for the UAE to become a leader in the digital asset space,” Pranav Sharma, founding partner of Woodstock Fund, told Blockworks. “Taxation rules are also on the individual side.”



<h3 class="wp-block-heading">Global companies look to Dubai and Singapore</h3>



It’s not just India’s crypto exchanges making the move. A raft of global companies are now preparing to launch in Dubai, including Binance, FTX Europe, Crypto.com and Bybit — even though Dubai-based crypto exchanges can only offer a limited number of products and services to pre-qualified investors and professional finance service providers throughout the first phase of its “test, adapt, and scale” framework.



“Dubai is set to become the largest blockchain hub globally,” Domenik Maier, CEO of Dubai-based crypto market maker iBLOXX, told Blockworks. “A favorable tax regime, supportive legislation, access to capital and a wealth of talent makes Dubai the Web3 hotspot of the future.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors. <a href="https://t.co/LuNtuIW8FM">pic.twitter.com/LuNtuIW8FM</a>&mdash; HH Sheikh Mohammed (@HHShkMohd) <a href="https://twitter.com/HHShkMohd/status/1501566703322513408?ref_src=twsrc%5Etfw">March 9, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Singapore’s laws, too, are permissive for cryptocurrencies, where the purchase of digital assets isn’t considered taxable, and so capital gains <a href="https://cointelegraph.com/news/why-singapore-is-one-of-the-most-crypto-friendly-countries" target="_blank" rel="noreferrer noopener">aren’t taxable.</a>



Eric Barbier, founder and CEO of TripleA a company that allows businesses to pay and get paid in crypto says Singapore is “an efficient place to run a global business from.”



“I have been building companies in Singapore since the early 2000s because of its strong [intellectual property] laws, pro-business environment and international connectivity,” Barbier told Blockworks.&nbsp;



TripleA recently became one of the first crypto companies to be licensed by Singapore’s Central Bank, a process that took 18 months. Barbier believes that his company was able to receive regulatory approval as it ran by a business-to-business model, which made it “easier to enforce stringent regulatory and compliance standards.”&nbsp;



“Conducting a comprehensive verification process on a business is much easier than on a consumer or on an individual,” Barbier said.



Despite being headquartered in Singapore, Barbier says he has not completely ruled out the possibility of moving to Dubai.



“We are definitely not closing the doors to this possibility. At the moment, though, we are running a global business from Singapore and Europe,” he said. “It is imperative to have in place proper regulatory frameworks and good systems, which will ensure that we are not used as a vehicle for money laundering or terrorism financing in any way.”



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India’s Tax Regime Prompts Crypto Companies To Leave

Sam Reynolds

<div id="highlights-block_619f8361ab0fa" class="highlights">
 <ul>
 <li>A CNN affiliate in India has confirmed that the government isn’t seeking a total crypto ban with its new bill, but rather mechanisms to regulate the asset class as a commodity</li>
 <li>The government is particularly concerned about crypto’s potential role in financing terrorism</li>
 </ul>
 
</div>



On Wednesday, Blockworks reported on language <a href="https://cms.blockworks.co/india-crypto-ban-about-payments-not-the-asset-class/" target="_blank" rel="noreferrer noopener">in a recent bill before India’s parliament</a> that mentioned a ban of all “private cryptocurrency”. Local media in the country have now confirmed with their government sources that the government’s intent is something different. 



According to a local CNN Affiliate in-country, the government intends to regulate crypto and is primarily concerned with its use in the underground economy and terror financing. A wholesale ban is not in the works.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Breaking?src=hash&amp;ref_src=twsrc%5Etfw">#Breaking</a> | <a href="https://twitter.com/hashtag/Exclusive?src=hash&amp;ref_src=twsrc%5Etfw">#Exclusive</a> | Top Government Sources on Cryptocurrency Regulation: There is no ban on <a href="https://twitter.com/hashtag/Crypto?src=hash&amp;ref_src=twsrc%5Etfw">#Crypto</a>. A regulation mechanism will be in place so that it’s not misused. <a href="https://twitter.com/hashtag/CryptoNews?src=hash&amp;ref_src=twsrc%5Etfw">#CryptoNews</a> (Exclusive Input: <a href="https://twitter.com/manojkumargupta?ref_src=twsrc%5Etfw">@manojkumargupta</a>)<a href="https://twitter.com/maryashakil?ref_src=twsrc%5Etfw">@maryashakil</a> shares more details with <a href="https://twitter.com/JamwalNews18?ref_src=twsrc%5Etfw">@JamwalNews18</a> <a href="https://t.co/s8LzFXjNgo">pic.twitter.com/s8LzFXjNgo</a>&mdash; News18 (@CNNnews18) <a href="https://twitter.com/CNNnews18/status/1463364400304345090?ref_src=twsrc%5Etfw">November 24, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



To do this, the government intends to not recognize crypto as tender and put in a comprehensive KYC/AML mechanism at the various fiat gateways in-country.&nbsp;



&#8220;A strict mechanism will be in place so that law enforcement agencies can trace the origin of cryptocurrency used for illegal or anti-national work,&#8221; CNN’s sources said.&nbsp;



Speaking with CNBC’s Squawk Box Asia, Avinash Shekhar, co-CEO of Zebpay, an exchange, said that their initial discussions with the government had “positive vibes.” “There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back,” he told CNBC.



<blockquote class="wp-block-quote">“The message or the feelers which we are getting from the government is that they’re looking for some kind of regulation — strict regulation, but not a complete ban.”</blockquote>



Regardless, local traders in India engaged in extensive panic selling, thinking that the ban would be more extensive than initially reported.&nbsp;



On WazirX, an Indian exchange, bitcoin traded at a 15% discount at one point before recovering.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="944" height="574" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png" alt="" class="wp-image-11819" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=944 944w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=423 423w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=80 80w" sizes="(max-width: 944px) 100vw, 944px" /><figcaption>Source: WazirX</figcaption></figure>



Since then, the panic selling has subsided and prices have leveled out.&nbsp;



A <a href="https://www.bloomberg.com/news/articles/2021-11-24/india-is-said-to-mull-allowing-crypto-trading-for-some-investors" target="_blank" rel="noreferrer noopener">report from Bloomberg</a> also said that the government isn’t planning a wholesale ban, but may consider limiting the accessibility of exchanges to accredited investors.



Globally, the price of bitcoin has remained steady at $57,984 down 2.4% over the last 24 hours according to <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.



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