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The year of the cryptocurrency route

Along with the fall in bitcoin prices, it was a negative year for cryptocurrency in India. Photo: Bloomberg

Along with the fall in bitcoin prices, it was a negative year for cryptocurrency in India. Photo: Bloomberg

Mumbai: In 2018, "how to invest in bitcoin" was one of the most sought after questions in India even though it is not possible to buy or sell bitcoins using a bank account.

Bitcoin exchanges fought the case against the Reserve Bank of India (RBI) after the regulator banned the use of bank channels to carry out cryptocurrency transactions.

Along with the fall in bitcoin prices, it was a negative year for cryptocurrency in India.

"The year was negative for cryptocurrency, the government had to come out with rules and regulations that they did not yet do, but the fact that they issued an RBI circular almost prohibiting them in India by not allowing banks to do cryptocurrency transactions , it was not positive for India, the case started in June 2018. We do not know what will happen, some companies have closed or left India, "said Rashmi Deshpande, associate partner of Khaitan & Co., a law firm.

The next date for the hearing of the case is January 15th.

In 2018, the main cryptocurrency bags closed the sale. For example, Zebpay, one of the largest cryptocurrency exchanges in India, closed its doors in September. The business closed with Coinsecure is due to internal fraud and the founder is now trying to start business outside India.

In the last year, several agencies have examined the cryptocurrency companies.

First, the income tax department (I-T) examined bitcoin exchanges to determine the taxation on bitcoin investments.

Following this, the direction of the order forces conducted an investigation to verify the presence of a violation of the Foreign Exchange Management Act (FEMA).

Meanwhile, regulators, including the RBI, the Securities and Exchange Board of India (Sebi) and the information technology ministry have come together to form a cryptocurrency regulation, which does not yet exist.

Meanwhile, cryptocurrency prices have also declined. For example, the bitcoin was $ 14,112 in January 2018. As of December 14th, it was about $ 3,319, according to data from coinmarketcap.com, a platform that records cryptocurrency prices.

What you should do

According to experts, it will be a difficult year for the sector. "For the next two years, there is very little hope, we also have to see how the regulation will be formulated, it's a long wait and an expensive relationship," said Deshpande.

Exchanges that are still in business are adopting a wait-and-see approach.

"We will wait for the verdict and then we will take a call. At this time the activity is low, but we have not yet decided how to proceed", said Sathvik Vishwanath, CEO and co-founder of Unocoin, a bitcoin exchange platform.

Considering the uncertainty surrounding the cryptocurrency, it would be advisable not to take it into account.

If you still want to invest, it would be important to understand regulatory changes before venturing into it.

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