Crypto’s huge part of the ecosystem was built around bypassing traditional financial rails, private wallets, offshore transfers, stablecoins, anonymous movement of capital.
There are very real concerns around money laundering, tax evasion, and moving wealth outside the country. Any government should worry about that.
But India’s approach to crypto has been completely confused from day one. For years, the focus was only on taxation. Slap 30% tax and add 1% TDS. Make exchanges report everything. Basically treat crypto like a financial asset whenever revenue was involved.
Now suddenly policymakers are waking up to the fact that users can withdraw crypto to private wallets and potentially move value globally outside normal forex systems. And this ET article basically says there’s still no clear law banning withdrawals.
So exchanges are panicking and making their own rules, some blocking withdrawals, some discouraging them, Binance saying it’s allowed globally and there’s no Indian law against it.
The absurd part is the government wanted to tax and control crypto first, without fully understanding how crypto actually works.