MUMBAI: Cryptocurrency exchanges in India have stepped up their efforts to detect suspicious actions and clamp down on ‘pump and dump’ schemes, as bitcoin breached the $40,000 mark yesterday. CoinDCX, a big cryptocurrency change mentioned that it has frozen 4 accounts which had been used for artificially pushing up the worth of smaller cryptos in a bid to lure retail buyers to enter at inflated costs.
India lacks any formal KYC guidelines or change laws for cryptocurrency and therefore exchanges have devised their very own guidelines. The shortage of regulation comes even because the US Monetary Crimes Enforcement Community (FINCEN) has proposed obligatory KYC norms for transfers of cryptocurrency to non-custodial wallets above $3,000.
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“There have been cases the place sure transactions had been crimson flagged after they had been in battle with AML insurance policies on the change and we needed to search particulars on supply of funds from the purchasers,” mentioned Monark Modi, founder and CEO, Bitex, a UAE primarily based cryptocurrency change that has operations in India.
“At Bitex along with guaranteeing strict KYC, we even have stringent Anti Cash Laundering (AML) insurance policies that ensures that transactions performed on the change are authentic and in accordance with laws,” he added. Neeraj Khandelwal, co founder, CoinDCX warned buyers in opposition to investing in small cryptocurrencies with out satisfactory information. “Whereas small cap crypto cash might look profitable, just like penny shares, it’s crucial that new cryptocurrency buyers do satisfactory analysis concerning the initiatives, workforce, investor backing, technicals, and fundamentals earlier than investing in low worth and illiquid markets,” he mentioned. “We noticed pump and dump manoeuvres by operators in small cap, low buying and selling volumes crypto cash and we estimate this has affected a number of customers throughout the globe. We have now proactively recognized and frozen 4 accounts of such individuals,” he added.
The heightened push in direction of compliance comes at the same time as curiosity in crypto investing has surged in India. WazirX, India’s largest cryptocurrency change, now studies a person base of over 1 million, up from the 550,000 customers it talked about in a blogpost in June 2020. The change reported transactions price $2.34 billion in 2020. Nonetheless 70% of its customers had been under the age of 34 and 85% had been males, in response to information launched to Mint by the cryptocurrency change. The market capitalisation of cryptocurrencies surged previous the $1 trillion mark on the again of a pointy rally over the previous month. Bitcoin surpassed its 2017 peak of slightly below $20,000 on 16 December 2020 and presently trades near $40,000.