Hong Kong Urged to Issue HKD Stablecoin

Coinbase Affirms Commitment to India Despite Disabling Sign-UpsLeading US-based cryptocurrency exchange Coinbase announced on Monday that it has temporarily disabled new user sign-ups for its exchange platform in India.A report emerged via India’s English-language business daily The Economic Times on Monday which stated that Coinbase was stopping “all services” for Indian users.Photo by Big G Media on UnsplashClarification of a misunderstandingIt appears that Coinbase sent emails to a subset of its Indian customers, notifying them of the cessation of exchange operations in the country by September 25. However, a more recent report by TechCrunch outlined that Coinbase has provided further clarification that these emails were sent exclusively to customers who did not meet the updated standards set by the company.On that basis, these messages do not affect and are not relevant to the majority of Coinbase users in India. The email further advised affected users to transfer their funds from the platform by the specified date.A Coinbase spokesperson communicated to TechCrunch via email, stating:“We stopped allowing new user sign-ups on our exchange product in India back in June of this year. We maintain a robust tech hub in the country and offer live products, including our Coinbase Wallet. We are committed to India over the long term.”Coinbase’s proprietary exchange app in India reportedly boasts fewer than 50,000 monthly active users, as indicated by data from Sensor Tower, shared by an industry executive.Difficulty in cracking Indian marketDespite its aspirations, Coinbase has been unable to make headway with local authorities since launching its exchange in India over a year ago. The lack of progress with local officials has proven frustrating for company executives, including Durgesh Kaushik, who joined Coinbase last year as the Senior Director for Market Expansion, only to leave the company within a couple of months.Coinbase’s CEO, Brian Armstrong, made a visit to India last year to launch the exchange service by adding support for India’s popular payment instrument, the Unified Payments Interface (UPI). Unfortunately, the body overseeing UPI immediately denied Coinbase’s recognition, leading Coinbase to suspend support for the payment system shortly thereafter.UPI has proven to be a runaway success in India. Consequently, being able to access and integrate with it would be very important in providing Coinbase’s Indian customers with the means of on-ramping and off-ramping between the exchange and fiat currency. Coinbase affirmed its commitment to collaborating with the National Payments Corporation of India (NPCI) relative to UPI but these efforts simply have not borne fruit.RBI pushbackIn May of the same year, Armstrong disclosed that Coinbase had to halt its trading service in India due to “informal pressure” from the Reserve Bank of India (RBI), the nation’s central bank. Armstrong pointed out that cryptocurrency trading isn’t illegal in India — in fact, the country had recently imposed taxation on it. However, there were elements within the government, including the RBI, that appeared less enthusiastic about cryptocurrencies and were exerting “soft pressure” behind the scenes.Notably, other Indian cryptocurrency exchanges like CoinDCX and CoinSwitch remain operational, but they’ve had their own struggles in their own local market. In August CoinSwitch downsized its headcount, citing a 30% tax on crypto gains and a 1% tax deducted at source (TDS) on transactions as contributing factors. That same month, CoinDCX cut its headcount by 12%.

The U.S. Department of Justice said on Dec. 2 that it had seized the web domain tickmilleas.com, which was used to facilitate cryptocurrency investment fraud (CIF) schemes, adding to two others seized last month as part of actions against the same Burma-based network. According to the announcement, the domains were operated by scammers based in Kyaukhat, Burma, who presented the site as a legitimate investment platform in order to solicit deposits from victims.Photo by Markus Spiske on UnsplashPromises of high returns as baitVictims who reported the activity to the Federal Bureau of Investigation (FBI) indicated that the recently seized website displayed fabricated investment returns and showed purported deposits credited to their online accounts. These figures appeared during guided walkthroughs of falsified trades, creating the appearance of a functioning platform. The Justice Department said the domain seizures are among the first actions taken since it established its first district-level CIF strike force, known as the Scam Center Strike Force, three weeks earlier. The unit operates under the U.S. Attorney’s Office for the District of Columbia. According to the DOJ, the group behind the scheme is known as the Tai Chang scam compound. The network is described as being affiliated with the Democratic Karen Benevolent Army (DKBA) in Burma, Trans Asia International Holding Group Thailand Company Limited, and other entities. The U.S. Treasury listed these parties as specially designated nationals on Nov. 12, citing their ties to Chinese organized crime and their involvement in developing scam hubs across Southeast Asia. Russia probes crypto briberyWhile the U.S. case focused on fraud targeting individual investors, a separate development in Russia involved alleged corruption tied to cryptocurrency. DL News, citing a local media report, said Russian prosecutors are seeking to seize a portfolio of luxury assets linked to Georgy Satyukov, a fugitive former employee of the Ministry of Internal Affairs, after investigators concluded he had accepted illicit payments in Bitcoin and Ethereum, described as the world’s largest cryptocurrencies. Russian authorities allege that between March and October 2021, Satyukov received $184 million in Bitcoin and $30 million in Ethereum from operators of the failed WEX crypto exchange in return for shielding them from a criminal investigation. WEX had taken over the operations of the BTC-e trading platform in 2017. Investigators say Satyukov liquidated much of his cryptocurrency holdings and used the proceeds to purchase residential and commercial properties in several cities, as well as high-end cars, luxury watches, and jewelry. They have identified $29.6 million in assets believed to be linked to the alleged bribes, which could be transferred to the Federal Treasury if prosecutors win a conviction. The U.S. domain seizures and the separate corruption investigation in Russia illustrate the varied ways cryptocurrency has been implicated in recent criminal cases. Both developments underscore the continued attention authorities are giving to the risks surrounding digital assets. 

It emerged on Wednesday that the Indian version of the Apple App Store has blocked access to eight crypto exchanges that were recently subject to a show cause notice from an Indian government agency, the Financial Intelligence Unit (FIU). The development occurred only two weeks after these global firms were flagged for allegedly operating "illegally" in the country. The FIU had cited non-compliance with India's anti-money laundering rules. In its statement on Dec. 28, the FIU urged India's IT Ministry to block the websites of all nine services in the country. The affected exchanges include Huobi, Gate.io, Bittrex, Binance, Kraken, Kucoin, MEXC Global and Bitfinex. Binance acknowledged the issue in a social media post, stating that it will continue to work with local regulators. Interestingly, Bitstamp, another exchange mentioned by the FIU, remained operational on the App Store in India. While these apps have been removed from the Apple App Store, they are still available on the Google Play Store in India and their websites remain accessible within the country. Users who had previously installed these apps on their devices can still access them. Photo by Naveed Ahmed on UnsplashTax avoidanceThe backdrop for this action involves a trend where many Indian traders had shifted to global cryptocurrency platforms rather than native digital asset exchanges. India initiated cryptocurrency taxation last year, imposing a 30% tax on gains and a 1% deduction on each crypto transaction.  While Indian-based exchanges like CoinSwitch, CoinDCX and WazirX maintain compliant know-your-customer verifications, global platforms have not followed suit. Notably, WazirX has experienced a drastic 97% drop in trading volume over two years as many traders migrated to global apps. It’s thought that as many as five million crypto users have shifted their trading activity to offshore exchanges. The tax has proven to be controversial and according to Dr. Vikash Gautam, the author of a report on the tax measure published last November, “it just isn’t enforceable . . . It is possible to be done with international cooperation, but we do understand it is a long process. Some of the other countries have some arrangements with international exchanges to track that." Leveling the playing fieldIt’s amid that competitive backdrop that native Indian exchanges lobbied the Indian government through the Bharat Web3 Association (BWA) to take action against unregulated offshore exchanges recently. CoinSwitch's co-founder and CEO, Ashish Singhal, urged offshore exchanges to comply with local regulations, suggesting registration with the FIU and adherence to India's Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures. Singhal, whose CoinSwitch platform is a founding member of the BWA industry advocacy group, highlighted that this would not only benefit offshore exchanges but also enhance consumer protection in India through increased regulatory oversight. Earlier warnings from Indian cryptocurrency exchanges foresaw users shifting to decentralized exchanges or non-compliant services due to the New Delhi government's taxation policy on crypto. In response, CoinDCX announced incentives for customers transferring their crypto assets from global exchanges to its India-based platform. Taking to social media on Wednesday, CoinDCX founder Sumit Gumpta stated:”This is a defining moment for [virtual digital assets] in India, and we're dedicated to facilitating a seamless and secure transition for investors navigating these changes.”