Comprehensive crypto database in works, to be active by year end 

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India is actively working towards developing a comprehensive database of all cryptocurrency exchanges operational globally. The main intention is to equip Indian law enforcement agencies like the Income Tax (IT) department, Enforcement Directorate (ED) and Central Bureau of Investigation (CBI)  with crucial information on movement of crypto assets, particularly across the dark net.

As per media reports, the database is set to be launched by the end of the ongoing financial year. Earlier this year, there were reports of India’s home ministry working towards a separate tool, namely the cryptocurrency intelligence and analysis tool, or CAIT. Its main purpose will be to monitor crypto transactions happening across the dark net, which remain largely untraced and unidentified. 

Data from Financial Intelligence Unit (FIU) suggests that between 2019-21, cryptocurrencies worth Rs 28,000 crore were funnelled towards financing drugs. The move is also critical, given that India has recently seen a spate of crypto scams and frauds. 

The most recent incident came from Himachal Pradesh, where fraudsters cheated investors of more than Rs 200 crore via multiple crypto coins like KRO and DGT. In what can be called a rug-pull, the scamsters lured in people with the prospect of high returns, over a period of 5 years starting 2018, before recently pulling the plug and suddenly disappearing. 

On the other hand, aggressively high taxation on crypto trades in India has left many exchanges in a lurch. Some, like Gemini, continue to maintain a positive outlook. As per media reports, Gemini plans to invest Rs 200 crores in India for expanding its operations over the next 2 years. Others look outwards to continue the crypto dream, like Mudrex, which recently gained approval to function in Italy, and is now in the process to obtain approval for functioning in the United Kingdom. US-based crypto exchange Coinbase recently disabled all new sign ups from India