In the Lok Sabha, India's lower house of parliament, the government of India offered some updates on its cryptocurrency law and investigations into cryptocurrency exchanges. "By definition, cryptocurrency assets are borderless, and international coordination is required to prevent regulatory arbitrage," stated a minister of state in the Ministry of Finance.

The Indian Government Responds to Crypto Bill and Regulation Questions

The Indian government responded to two sets of questions concerning cryptocurrency and its regulation posed by members of the Lok Sabha, India's lower house of parliament, on Monday.

Parliament member Bhartruhari Mahtab asked the finance minister to explain "the current status of the cryptocurrency bill, which was due to be tabled during the winter session of the Parliament in 2021," as well as "the timeframe within which the cryptocurrency bill would be tabled and subsequently open for public inputs."

Pankaj Chaudhary, minister of state in the Ministry of Finance, responded without elaborating:
"Crypto assets are, by definition, transnational, necessitating international cooperation to avoid regulatory arbitrage. As a result, any regulation on the issue can only be effective with major international collaboration on assessing the dangers and advantages, as well as the establishment of a common taxonomy and standards.

Mahtab also requested the finance minister to specify which ministry and/or department would govern cryptocurrencies and crypto tokens, as well as which would regulate non-fungible tokens (NFTs), decentralised apps (dApps), real estate tokens, and other blockchain-based assets".

Chaudhary simply replied:
"The Ministry of Finance is currently in charge of crypto asset policy and the surrounding ecosystem".

Members of Parliament have also requested information on cryptocurrency exchanges under investigation.
Several other parliament members have asked for "information about crypto exchanges that are being investigated by the authorities for money laundering and tax evasion crimes."

The Enforcement Directorate (ED), according to Chaudhary, "is examining many cases relating to crypto scams, in which a few crypto exchanges have also been found complicit in money laundering." According to the ministry, as of December 14:
In these cases, the proceeds of crime totaling Rs. 907.48 crores have been attached/seized, three people have been detained, and four Prosecution Complaints have been filed before the Special Court, PMLA.

Furthermore, assets totaling Rs. 289.68 crores ($35,046,152) have been confiscated under the Foreign Exchange Management Act 1999 (FEMA). Furthermore, one Show Cause Notice has been issued under FEMA to Zanmai Labs, which operates the crypto exchange Wazirx, and its director for transactions involving crypto assets worth Rs. 2,790.74 crores.

According to the minister, 12 bitcoin exchanges have been probed for dodging Goods and Services Tax (GST). So far, 110.97 crore rupees have been collected, including interest and penalties.

Nirmala Sitharaman, India's finance minister, stated in October that the government intends to discuss crypto legislation with the G20 countries in order to build "a technology-driven regulatory framework" for crypto. Last week, India's economic affairs secretary, Ajay Seth, stated that the G20 nations hope to reach a policy agreement on crypto assets in order to improve global regulation. During the ninth India-US Economic and Financial Partnership conference last month, US Treasury Secretary Janet Yellen and Sitharaman addressed crypto regulation.