India's Big Move: Tougher Rules for Crypto Users
Stricter Rules Introduced by Financial Intelligence Unit (FIU)
India is implementing stricter regulations to curb money laundering and ensure user verification in the cryptocurrency sector. The country's Financial Intelligence Unit (FIU) has introduced new rules that mandate crypto platforms to verify users' identities using live selfies to prevent AI-generated fake photos. Additionally, platforms must check users' locations and IP addresses during sign-up.
Key Requirements for Users
- Live Selfies: Mandatory for identity verification.
- Location and IP Address: Must be provided during sign-up.
- Bank Account Linking: Platforms send a small amount to verify the bank account.
- Government ID, Email, and Phone Number: Required for user registration.
Why the Stricter Regulations?
With over 1.4 billion people, India represents a significant market for cryptocurrency. The government aims to ensure safety and legality in crypto transactions.
Taxation Challenges
The Indian tax department highlights the difficulties in collecting taxes due to decentralized exchanges and anonymous wallets. The current tax rate on crypto gains is 30%, but users can only deduct the original cost of the crypto, not losses from other sales. This means losses from one sale cannot be used to offset profits from another.
