Manhar Garegrat News

The world's largest cryptocurrency was last up 8.5% at $62,135, its highest since November 2021, while Ethereum rose 5.35% to $3,436, having hit another two-year high. Meanwhile, the global cryptocurrency market cap surged 8.9% to nearly $2.3 trillion in the last 24 hours.

As we conclude 2023, the Indian and global crypto industry went through quite a few milestones in terms of regulatory developments.

Changpeng Zhao's exit and the $4 billion fine imposed on Binance are significant events that could shape the future of the crypto markets. Meanwhile, industry experts highlighted that Zhao's departure signals a shift towards transparency and regulatory compliance. Manhar Garegrat, Country Head at Liminal, said, «As the largest offshore digital assets exchange, Binance has been at the centre of regulatory scrutiny in the US and other jurisdictions. CZ's stepping down and handing over the CEO position to Richard Teng is a clear indication that Binance is taking these concerns seriously and is committed to working with regulators to establish a more compliant operating model.» «This is a significant event for the global crypto landscape. It is a sign that the industry is maturing and is becoming more accountable to its stakeholders. This is a positive development that will ultimately benefit the industry as a whole. This will further lead to increased transparency, greater regulatory compliance and wider adoption of digital assets,» Manhar said. Following Zhao's news, pressure on major cryptocurrencies increased, resulting in the overall crypto market cap falling below $1.4 trillion on Wednesday. However, on Thursday's trade, the crypto market cap bounced back and surged nearly 3% to $ 1.42 trillion.

Terra investors around the world lost billions of dollars when the algorithmic-stablecoin project crashed but they recovered a small part of their bets when a new token was distributed as compensation. Investors in India aren’t as fortunate. Because the country’s tax system is punitive to crypto investing, TerraUSD and Luna token holders who got the new coin — known as Luna 2.0 — in a so-called airdrop face a double whammy. They could be taxed as much as 30% of the value of tokens received and they won’t be able to offset any gains in the new token against losses from the previous one, tax experts said. Under the new crypto tax regime, effective April 1, any income from the “transfer” of a “virtual digital asset” will be taxed at a flat rate of 30%. It does not explicitly mention how airdrops should be taxed, but Jay Sayta, a technology and gaming lawyer, and Manhar Garegrat, executive director of policy at crypto exchange CoinDCX, said the distributions can be seen as income and are subject to the tax.

Luna 2.0 started trading on May 28.

Crypto-exchange analysts warn that the TDS will suck liquidity out of the market.

crypto assets in February, it was the 30% rate on income from digital-asset investments that grabbed headlines. But it’s a different levy that has the industry warning of a potentially destabilizing liquidity crunch. Along with the capital gains charge, the finance ministry announced a 1% tax deductible at source, or TDS, on all digital-asset transfers above a certain size, starting July 1. No other country imposes such a tax on crypto, according to Anoush Bhasin, founder of crypto asset tax advisory firm Quagmire Consulting. Crypto-exchange executives, lawyers and tax analysts warn that the TDS will suck liquidity out of the market by forcing high-frequency traders to dramatically curtail their trading. Combined with the government’s decision not to permit offsetting of trading losses in digital assets, it threatens to accelerate an exodus of crypto companies and workers from India, they say.

Starting from April 1, retail investors and crypto exchanges will be paying a 30 percent tax gain from virtual digital assets, which is expected to drop the volumes of transactions in the coming months, said the experts in a Twitter space session organised by Moneycontrol yesterday.