IBW2024: Regulatory Clarity, Security Risks, and Tax Reforms Dominate Discussions

India Blockchain Week, held on 4th-5th December, drew attendees from all over the world to the country’s tech city of Bengaluru. Organized by the venture capital firm Hashed Emergent, IBW saw calls for web3 focused regulations in India amid security concerns in the wake of WazirX hack earlier this year.

Discussions also centered on DeFi, developments on blockchain, and the overall potential of India in the Web3 ecosystem.

Regulations and Taxes Remain a Roadblock

Talking exclusively to Cryptonews, chairman of India’s top crypto lobbying group, Bharat Web3 Association, Dilip Chenoy said, “There is no comprehensive regulation covering the Web3 space in India yet,” adding that while the Ministry of Finance and Ministry of Electronics and Information Technology (MeitY) are engaging with industry stakeholders, the absence of clear guidelines creates hurdles for developers, exchanges, and investors alike.”

India currently imposes 30% tax on crypto gains along with 1% direct tax on each crypto transaction. The centralized exchanges in the country have vehemently opposed this tax regime.

Though there are regulations in place for crypto businesses in India, but the country lacks comprehensive crypto-focused regulations, Mr Chenoy explained.

“If you’re doing anything with VDAs, you are regulated by the Financial Intelligence Unit (FIU) for anti-money laundering and counter-terrorist financing compliance. If you advertise, you’re governed by ASCI guidelines. And if you’re earning income on crypto, you’re subject to tax laws, including a 30% income tax and 1% TDS.”

The main concern for the government remains the use of crypto in illicit activities, Mr Chenoy noted.

WazirX Users Express Frustration After Missing Out on Bull Run

The second day of India Blockchain Week 2024 unfolded with an electrifying milestone as Bitcoin soared past $100,000 for the first time, sparking waves of celebration across the global crypto community.

The air was charged with optimism at the conference, with industry leaders hailing this as a testament to blockchain’s growing mainstream adoption. Yet, amidst the jubilation, thousands of WazirX users, whose assets remain frozen on the exchange following a $230 million hack earlier this year, found themselves unable to partake in the historic bull run.

“I’ve held my tokens for four years, waiting for this bull run. Now, as Bitcoin hits $100K, my funds are stuck on WazirX. The hack didn’t just steal my money—it stole my moment,” said a frustrated WazirX user who has his funds stuck on the exchange.

India’s Potential in Web3 Sector

There is a lot of interest in India’s Web3 sector as VCs look to return to the country after a break. Talking to Cryptonews, Polygon’s India Head Aishwary Gupta said that there are some encouraging signs for India’s web3 ecosystem. “ I think the VCs who came to India left, they’ll start coming back to India once we have more clear regulations and the country is heading that way.”