Cryptogram - 17MAR2023

🚨📢 Pay your tax, do KYC

17 March 2023

The newsletter is put together by Giottus Crypto Platform and The News Minute’s Brand Studio. You can read all the previous issues of Cryptogram

.

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Uff, what a week this has been. 

Last Friday, the SVB bailout had still not happened and we were all preparing for a colder, longer, darker crypto winter.

Today, we are looking at BTC having soared past $25K like a boss. 

Last week has been proof of the fact that despite the promise of a decentralised monetary system, crypto is still deeply coupled with stocks and mainstream macroeconomic factors. But whatever, we will savour the small wins for now! 

Meanwhile, the Indian government has taken more steps to regulate crypto, and India-based companies like Giottus are stepping up on their own to protect consumers, and prevent and detect illegal activities. So, our main piece today is about what you, as a user, need to do to be fully compliant with laws while trading crypto. 

Before that, here are the Top-5 stories of this issue:

1

DeFi lending and borrowing protocol Euler suffered a

. But apparently, the hacker is a

.

2

The chairman of the US SEC

that proof-of-stake tokens should be securities. Ethereum as a security, soon?

3

Yuga Labs

its new NFTs selection, HV-MTL, which stands for heavy metal.

4

Say hello to decentralized http://,

, running on Ethereum Virtual Machine. This will help users access dApps without having to depend on centralized internet. Bye-bye censorship?

5

Salesforce is rolling out a platform to enable big brands to have Web3 loyalty programs. But Meta is ditching NFTs.If you are into electronic music, this might interest you: Polkadot is partnering with Beatport to bring Web3 to electronic music DJs and producers around the world.

 WEEKLY MACROS

Total crypto market cap - $1.13 trillion -

 16.5% 

Bitcoin market cap - $475.92 billion -

13.5% 

The dollar index (DXY) - 104.1 -

1% 

Bitcoin Dominance - 42.93% -

12.2%

Crypto Fear and Greed Index - 51 - The market is neutral amid crypto bank crashes as Bitcoin (BTC) has found renewed support from investors and institutions.

 WEEKLY PRICE TRACKER

Price movements from last Friday

BTC Watch

 29% as bulls attempt to ride the momentum acquired from renewed interest in Bitcoin post crypto bank crashes

ETH Watch

 20% with BTC's price action providing the much needed catalyst for ETH and also in anticipation of Shanghai upgrade scheduled next month

Altcoins Watch

STX

:

 78% since layer-1 solutions built on BTC like Stacks are heavily correlated with BTC's price action post the success of BTC ordinals

IMX

:

 46% as ZK narrative picks up steam with Polygon's zkEVM upcoming launch this March end

CFX

: 

 90% with Conflux network (CFX) enjoying a monopoly in Bitcoin banned China after securing a deal with one of their social media networks

 WHAT'S HOT

  Coins to watch out for

Rocket Pool (RPL)

- With Liquid Staking Derivatives (LSDs), Rocket Pool, which is an Ethereum 2.0 staking pool that allows users to stake trustlessly towards a network of node operators. RPL, their native token, is worthwhile to keep an eye on. 

SingularityNET (AGIX)

- With the launch of GPT-4, an artificial intelligence tool designed to assist humans using chat as a mechanism, has popularised the AI field. With AI narrative going strong, all crypto's which deal with AI in some form will benefit directly from it. AGIX is already 50% in the last 7 days.

Project to watch out for

Arbitrum

- is a layer-2 solution designed to scale Ethereum. It lowers network congestion and transaction fees from Ethereum’s mainnet. It achieves this via the use of Optimistic rollups, where transactions are settled on a proprietary side chain. $ARB is Arbitrum's new token, which is being airdropped to eligible community members on Thursday, March 23.You can check your eligibility by going to

(beware of scam links). Also Arbitrum is transitioning to a DAO model, of which $ARB will be the governance token.

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 THE HOT TAKE

Crypto regulations in India are progressing, here’s what you need to do

On March 7, 2023, the Indian government imposed anti-money laundering provisions on the cryptocurrency sector. Crypto intermediaries will now come under the Prevention of Money-laundering Act, 2002 (PMLA). As per the Act, crypto entities will be obligated to record transaction and client data, monitor compliance, and report suspicious activities while empowering the Enforcement Directorate (ED) to investigate suspected crypto-related financial wrongdoings. 

Sounds complicated? Here is a ready reckoner list that will make it better for you.

1. KYC and additional compliance measures are now a must

Indian crypto exchange platforms have been brought on par with banks in terms Know-Your-Customer (KYC) norms and compliance.

Essentially, exchanges are treated as offering a financial product that is liable for misuse under anti-money laundering (AML) norms. 

This is a recognition of the growing importance of the sector and need for accurate activity tracking. This does indicate that the government is not planning to ‘ban’ the sector, as some speculate. 

The message from the government seems to be:

Invest safe and declare your taxes

.

2. Your records and transactions will be stored for 5+ years

All user records and transactions will be stored for 5 years by exchanges. This will enable retrospective analysis and tracking of money flow by enforcement agencies and allow Income Tax authorities to track IT obligations. 

This unifies the ecosystem in a way.

Indian exchanges have been highly compliant so far – but with their own set of practices related to KYC. Now, the direction has been given to the industry to follow a uniform scheme. All exchanges will follow similar procedures for record-keeping and notifying the agencies when required. This move will make Indian crypto platforms official ‘reporting’ players to alert the government to any suspicious transactions. This should strengthen trust among crypto investors and make the ecosystem robust. 

Founders of top crypto platforms are seeing the move as a positive step in recognizing the sector and believe that these moves will strengthen collective efforts by exchanges to prevent crypto assets from being misused by bad actors.

Knowing the above, what does it mean to you: the investor?

1) Choose compliant Indian exchanges for your trades

Global exchanges do not currently follow Indian local norms with respect to TDS deduction and record keeping. It is always on the investor to ensure that he/she is abiding by local laws. Therefore, we suggest you make your trades in Indian exchanges which have adopted the requisite measures as explained above. These KYC steps are indeed a pain point – but remember that once you cross the first hurdle, it should be smooth. Looking at it another way, if it’s easy for you to create an account and transact instantly on a platform, it is mostly not compliant.

In fact, trade volumes on big Indian exchanges have increased post this announcement (also accounting for the market being bullish). As per the data shared by

, a crypto market analysis firm, trade volumes for the top Indian exchanges, WaxirX, Coindcx, and Zebpay rose by 125 per cent, 131 per cent, and 108 per cent, respectively in the week after the PMLA was passed.

Source: Crebaco, Giottus

2) Pay your taxes

The government is now tracking all your trades and can do them retrospectively in the future as well. Declare all your gains in crypto and NFTs in your IT returns.

That’s it for this issue, see you next week.

If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

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