India’s Stance on Crypto Currency Justified by Global Trends

Jul 05, 2022 07:48 STI

By Lee Kah Whye
Singapore, Jul 5th (ANI): India’s conservative stance on not encouraging cryptocurrency is quickly vindicated by the negative experiences of various Crypto Funds, the latest being Singapore’s Three Arrows Crypto Fund . Experts say India correctly predicted economic headwinds and may have saved many people from economic ruin.
Last week, Singapore-based crypto hedge fund Three Arrows Capital (3AC) was reported by various media sources to be in trouble. It is one of the leading crypto investment firms that has recently struggled as the valuation of the crypto market plunged.
It has fallen by about a third since peaking in November last year.
In the latest sign of the impact of the crypto market slowdown, Bloomberg and Reuters quoted sources as saying 3AC went into liquidation after failing to make payments on a loan of 15,250 bitcoins (about $324). million USD) and 350 million USD of USDC, a stablecoin.
Reuters reported that his sources told him that a court in the British Virgin Islands, where 3AC’s fund is made up, issued the winding-up order on June 27. The commercial court orders the liquidation of a company if it is considered insolvent because it cannot pay its debts.
It is less common for companies to voluntarily liquidate.
3AC, one of the best-known hedge funds in crypto, was founded by former Credit Suisse traders Zhu Su, a Singaporean, and Kyle Davies at the kitchen table of their apartment in 2012. Zhu predicted the low of the last crypto cycle in December 2018 when bitcoin was worth around $3,850.
According to blockchain analytics firm Nansen, his blockchain holdings were once worth nearly $10 billion.
To add to its woes, Singapore’s central bank, the Monetary Authority of Singapore (MAS), last week reprimanded 3AC for breaching financial regulations.
On the other hand, Indian regulators had tried to ban cryptocurrencies to be struck down by the Supreme Court.

To curb crypto trading, a 1% withholding tax (TDS) on crypto transactions went into effect on July 1. tax on all transactions came into force on April 1.
India’s crypto community has railed against the new provisions and warned that it will have a severely negative impact on India’s crypto trade, especially with the global market crashing.
Sumit Gupta, co-founder and CEO of CoinDCX, tweeted that this tax would “do more harm than good”. He said developers and entrepreneurs could flee to friendlier jurisdictions and added that a 30% tax rate coupled with a 1% TDS is “unfair”.
The Indian government has been very careful not to legitimize crypto trading. He says they tax crypto because people profit from it.
“We warned against crypto and look at what has happened to the crypto market now,” Reserve Bank of India (RBI) Governor Shaktikanta Das said in an interview with CNBC-TV18 earlier this year. year after the value of cryptocurrencies plummeted. He had warned of the dangers of investing in something that has no underlying value. “Our position remains very clear, this will seriously undermine India’s monetary, financial and macroeconomic stability.”
According to CoinGecko, total cryptocurrency market capitalization has shrunk by more than a third, falling to around $930 billion from a peak of around $3 trillion reached in November 2021.
Although the crypto market is down this year, there is no specific reason for it. Analysts suggested that the broader global economic situation, characterized by higher interest rates and a looming recession, coupled with lower investor risk appetite, caused the decline.
This has caused various calamities in the market. Some believe a crypto winter has arrived. Besides 3AC, recent disasters include the collapse of stablecoin terra USD and its sister luna, as well as liquidity issues at lenders Celsius Network and Babel Finance. Earlier, crypto lender BlockFi and prime broker Genesis said they had to liquidate one of their major counterparties recently. In June, crypto giant Coinbase cut 1,100 jobs. Crypto broker Voyager Digital, which is believed to have issued the default notice to 3AC, was also affected.
“I think given this price drop from the all-time high of $68,000 to $20,000 now, it will probably take some time to come back. It will probably take a few months or a few years,” said Changpeng Zhao, the founder of the world’s largest crypto exchange, Binance, told the Guardian. He added that bitcoin could take years to recover from the recent crash.
However, other market participants remain optimistic about the future of crypto.
“What I want from bitcoin is short-term volatility and long-term growth,” said Kiana Danial, founder of Invest Diva and author of Cryptocurrency Investing For Dummies.
PricewaterhouseCoopers’ fourth annual global crypto hedge fund report released in June showed that although the crypto market is currently bearish, 35% of fund managers in its survey predicted that bitcoin will trade above 50,000. USD by the end of 2022 and another 42. percent expect it to trade between $75,000 and $100,000 by the end of the year.
JPMorgan Chase & Co. believes that the current phase of cryptocurrency deleveraging will not last much longer. In a note published on June 29, he supported this prognosis saying that it has been observed that “the crypto entities with the strongest balance sheets are now stepping in to help contain the contagion.” It was also noticed that venture capital funding, which is “an important source of capital for the crypto ecosystem, continued at a brisk pace in May and June.” (ANI)

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