By ANI | Updated: 1 January 2022
After the massive tax evasion of GST by cryptocurrency service provider WazirX, the Directorate General of GST Intelligence has come down heavily on cryptocurrency exchanges operating in the country, said sources.
“Around half dozen offices of cryptocurrency service providers have been searched and massive Goods and Service Tax (GST) evasion has been detected by DGGI,” sources told ANI.
Crypto wallet and exchange are platforms where merchants and consumers can transact with digital assets like Bitcoin, Ethereum, Ripple, etc.
According to sources, around Rs. 70 crore worth of tax evasion has been detected during the crackdown on cryptocurrency trade by Mumbai CGST and DGGI.
“The DGGI is investigating CoinSwitch Kuber by M/s Bitcipher Labs LLP, CoinDCX by M/s Neblio Technologies Pvt. Ltd., BuyUCoin by M/S I Block Technologies Pvt. Ltd. and Unocoin by M/s Unocoin Technologies Pvt. Ltd,” sources said.
Official sources further said, “They are providing facilitation intermediary services for buying and selling of crypto coins. These services attract GST rate of duty of 18 percent which all of them have been evading.”
Another official source, who was part of this search, told ANI, “These service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax. These transactions were intercepted by DGGI and they were confronted with evidence that proved non-payment of GST.”
A top source told ANI that they paid Rs. 30 crore and Rs. 40 crore as GST, interest, and penalty for non-compliance to the statutory provisions of GST law. For violating GST laws, the CBIC has recovered Rs. 70 crore from cryptocurrency service providers including WazirX.
On Friday, GST Mumbai East Commissionerate of Mumbai Zone detected GST evasion of Rs. 40.5 crore from cryptocurrency exchange WazirX and recovered Rs. 49.20 crore in cash pertaining to GST evaded, interest and penalty.
As per the claim made CoinDCX their crypto app allows buying of bitcoin and other cryptocurrencies instantly in India and has more than 7.5 million users and more than one crore downloads with Rs. 7 billion cryptos purchased.
As per the website which CoinSwitch Kuber trading platform has processed over $5 billion (roughly Rs. 37,260 crore), BuyUcoin based out of Delhi-NCR in India has more than one million users and traded more than $800 million (roughly Rs. 5,960 crore).
Unocoin is also a platform to trade Bitcoin, Ether, Tether, among other such platforms of crypto assets has offices in Bangalore which have processed more than 10 million as per their website.
OpenSea Marketplace Bug Sees at Least $1 Million of NFTs Sold Below Market Price
By Reuters | Updated: 25 January 2022
A bug in the largest NFT marketplace, OpenSea, allowed attackers to purchase at least $1 million (roughly Rs. 7.4 crore) worth of NFTs across multiple different wallets for significantly below market price, blockchain analytics firm Elliptic said on Monday.
A non-fungible token (NFT) is a form of cryptocurrency asset, which records the ownership status of digital files on blockchain. OpenSea is the largest marketplace for speculators and enthusiasts to trade their NFTs, with $4.8 billion (roughly Rs. 35,870 crore) worth of sales volume so far in January.
But a flaw in the marketplace allowed users to buy certain NFTs at prices which they had been listed for in the past, without the owner realising that they were still on sale.
OpenSea did not immediately respond to a request for comment.
“The exploit appears to come from the fact that it was previously possible to re-list an NFT at a new price, without cancelling the previous listing,” said Tom Robinson, chief scientist and co-founder at Elliptic.
“Those old listings are now being used to buy NFTs at prices specified in the past – often well below current market prices.”
For example, an NFT of a cartoon ape from the Bored Ape Yacht Club collection, Bored Ape #9991, was bought for 0.77 of the cryptocurrency ether (around $1,747 (roughly Rs. 1.3 lakh)) on Monday, despite the fact that such NFTs usually fetch hundreds of thousands of dollars.
Bored Ape Yacht Club is a set of 10,000 algorithmically generated cartoon ape NFTs made by the US -based company Yuga Labs.
The NFT’s original owner, who identified themselves on Twitter as “TBALLER.eth” (@T_BALLER6), tweeted their shock at the transaction, which they said they did not authorise:
“Yooo guys! Idk what just happened by why did my ape just sell for .77?????”
“I didn’t list me ape at all…. Now I’m seeing DMs it sold for .77?????? Wtf??????”
Elliptic’s Robinson said that he had identified eight NFTs stolen in this way so far, from eight different wallets, by three attacker wallets.
One person paid a total of $133,000 (roughly Rs. 99 lakh) for seven NFTs by exploiting the bug, before then quickly selling them on for $934,000 (roughly Rs. 7 crore), Robinson said.
He noted that while crypto wallets are usually anonymous, it may be possible for the attackers to be identified if they use an exchange to cash out into fiat currency.
As celebrities, investors, and top brands flock to the NFT market – where sales volumes and prices of some sought-after NFTs have seen eye-watering growth – the OpenSea bug may give some buyers reason to pause.
OpenSea was founded in 2017 and was recently valued at $13.3 billion (roughly Rs. 99,400 crore) in its latest round of venture funding.
Elliptic data shows that since 2020, $2 billion (roughly Rs. 14,945 crore) has been stolen from users of decentralised finance (DeFi) through hacks.
“It’s not common to see marketplace-wide exploits. We do see individual users being hacked and having their NFTs stolen, for example through phishing attacks, but it’s not common to see something that affects potentially the entire marketplace,” Robinson added.
© Thomson Reuters 2022
Cryptocurrencies Can Now Be Used for International Remittances on Brazilian Fintech Dock
By Reuters | Updated: 24 January 2022
Brazilian financial services provider Dock said on Friday it will start using cryptocurrencies to process international remittances as it expands to Latin America and Europe.
Brazilian reais will be converted into cryptocurrencies like Bitcoin then into another currency, such as the dollar, and will reach end users through Dock customers such as Vivo and Natura&CO. Bitcoin price in India stood at Rs. 29 lakh as of 12pm IST on January 24.
“It will be both a quick and cheap way of making remittances,” Frederico Amaral, head of products and technology at Dock, told Reuters in an interview.
International transfers have been an increasingly coveted niche for fintechs such as Remessa Online and Wise that can sell services more cheaply than large banks.
Created in 2014 after being acquired by the North American venture capital fund Riverwood Capital, Dock until last year was named Conductor.
Dock in December received approval from the Brazilian Central Bank to buy rival Brasil Pré-pagos (BPP), which brought with it a financial institution license.
In July, Reuters reported that Dock had hired banks for an initial public offering (IPO) in the United States.
According to Amaral, the US listing is a natural path for the company, but there is no rush because the company still has part of the $170 million (roughly Rs. 1,270 crore) it received at the end of 2020 from investors such as Temasek, Viking Global and Sunley House, a unit of Advent International.
© Thomson Reuters 2022
Bitcoin Price Falls Again After Steep Dive Last Week: All You Need to Know
By Reuters | Updated: 24 January 2022
Bitcoin dropped again on Saturday and was last down around 4 percent for the day, hovering around the $35,000 (roughly Rs. 26 lakh) level.
Bitcoin, the world’s biggest and best-known cryptocurrency, is now about half its $69,000 (roughly Rs. 51 lakh) peak in November. It was last at $35,049 (roughly Rs. 26 lakh), after falling as low as $34,000 (roughly Rs. 25 lakh) and following a steep fall on Friday. Bitcoin price in India stood at Rs. 29.4 lakh as of 10am IST on January 24.
The currency has had wild price swings and has been hit as risk appetite has fallen on inflation fears and anticipation of a more aggressive pace of interest rate hikes from the US Federal Reserve.
Other risk assets have fallen with stocks falling on Friday. The S&P 500 and Nasdaq recorded their biggest weekly percentage drops since the start of the pandemic in March 2020.
In a research note on Friday, Edward Moya, senior market analyst for the Americas at OANDA, said bitcoin was falling as “crypto traders de-risk portfolios following the bloodbath in stocks” and in advance of next week’s Federal Reserve policy meeting.
“Bitcoin remains in the danger zone and if $37,000 (roughly Rs. 27 lakh) breaks, there is not much support until the $30,000 (roughly Rs. 22.3 lakh) level,” Moya wrote on Friday.
Ether, the coin linked to the Ethereum blockchain network, dropped 6.7 percent to $2,396 on Saturday. Ethereum price in India stood at Rs. 2.04 lakh as of 10am IST on January 24.
© Thomson Reuters 2022
Cryptocurrency Ban: Russia’s Central Bank Calls for Crackdown on Mining, Transactions
By Agence France-Presse | Updated: 21 January 2022
The Russian central bank proposed Thursday cracking down on cryptocurrencies, a move which if adopted could disrupt the burgeoning virtual money sector as Russia is one of the largest crypto-mining nations in the world.
Russian authorities have for years criticised cryptocurrencies over fears they can be used for illegal activities and have called for regulation.
Authorities granted cryptocurrencies legal status in 2020, but their use in payments was never authorised.
The Bank of Russia called Thursday for reinforcing the ban on cryptocurrency payments, banning cryptocurrency mining, and tightening laws on trading virtual money.
“The use of cryptocurrencies creates significant threats to the well-being of Russian citizens and the stability of the financial system,” a report published by the central bank said.
It added that the swift growth of cryptocurrencies is driven by “speculative demand” that leads to the forming of a “bubble”.
The report added that cryptos resemble financial “pyramid schemes” because their value increases with the emergence of new players on the market.
It estimated the annual transaction volume of Russian citizens at $5 billion (roughly Rs. 37,270 crore).
Bloomberg earlier cited sources as saying that Russia’s domestic security agency, the FSB, had lobbied central bank head Elvira Nabiulina for a ban.
The FSB cited concerns over Russians frequently using the hard-to-trace transactions to support “undesirable organisations”, such as opposition groups.
Twitter Debuts Hexagon-Shaped NFT Profile Pictures
By Reuters | Updated: 21 January 2022
Twitter on Thursday announced the launch of a tool through which users can showcase non-fungible tokens (NFTs)as their profile pictures, tapping into a digital collectibles craze that has exploded over the past year.
The feature, available on iOS to users of the company’s Twitter Blue subscription service, connects their Twitter accounts to cryptocurrency wallets where the users store NFT holdings.
Twitter displays the NFT profile pictures as hexagons, differentiating them from the standard circles available to other users. Tapping on the pictures prompts details about the art and its ownership to appear.
Like other tech companies, Twitter is rushing to cash in on crypto trends like NFTs, a type of speculative asset authenticating digital items such as images, videos, and land in virtual worlds.
The social media platform last year added functionality for users to send and receive Bitcoin.
Sales of NFTs reached some $25 billion (roughly Rs. 1,86,250 crore) in 2021, according to data from market tracker DappRadar, although there were signs of growth slowing toward the end of the year.
Proponents of Web3 technologies like NFTs say they decentralise ownership online, creating a path for users to earn money from popular creations, rather than having those benefits accrue primarily to a handful of tech platforms.
Critics dismiss the decentralisation claims, noting that many of the services powering adoption of those technologies – like the six crypto wallets supported by Twitter’s NFT product – are backed by a small group of venture capitalists.
In a widely circulated tweet after the launch, security researcher Jane Manchun Wong highlighted one of those links, showing how an outage at venture-backed NFT marketplace OpenSea temporarily blocked NFTs from loading on Twitter.
OpenSea did not immediately respond to a request from Reuters for comment.
© Thomson Reuters 2022
Singapore Central Bank Issues Guidelines to Discourage Crypto Trading by Public
By Reuters | Updated: 17 January 2022
The Monetary Authority of Singapore (MAS) on Monday issued guidelines that limit cryptocurrency trading service providers from promoting their services to the general public, as part of a bid to shield retail investors from potential risks.
Singapore is a popular location for cryptocurrency companies due to a comparatively clear regulatory and operating environment and is among the forerunners globally in developing a formal licensing framework.
But the city-state’s authorities have repeatedly warned that trading in digital payment tokens (DPT), or cryptocurrency, is highly risky and not suitable for the general public, as they are subject to sharp speculative swings.
The new guidelines clarify the expectations of MAS that companies should not engage in marketing or advertising of DPT services in public areas in Singapore or through the engagement of third parties, such as social media influencers, to promote DPT services to the general public.
They can only market or advertise on their own corporate websites, mobile applications or official social media accounts.
“MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases,” Loo Siew Yee, MAS Assistant Managing Director (Policy, Payments and Financial Crime), said in a statement.
“But the trading of cryptocurrencies is highly risky and not suitable for the general public. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public.”
© Thomson Reuters 2022
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