New Delhi, February 7th: As we navigate the debate on the future of crypto in India, simply imposing a 30 percent tax on digital assets is not enough as money laundering and hawala-based transactions involving cryptocurrencies are growing significantly on the dark web, threatening India’s national security . warn experts. A Supreme Court bench last week found that money laundering is a “more serious and heinous crime than murder” because it hampers the entire economy.
Even non-fungible tokens (NFTs) are now vulnerable to money laundering. According to a report by blockchain data platform Chainalysis, a small but growing portion of activity on NFT marketplaces could be traced to money laundering. “While money laundering is difficult to quantify in physical art, the inherent transparency of blockchain allows us to make more reliable estimates of NFT-based money laundering,” the report said last week. Union Budget 2022-23: Crypto tax regime hints at future of cryptocurrencies as financial assets in India.
According to legal and cyber law experts, the crypto ecosystem is becoming fertile ground for cybercriminals. “This is because these crypto assets and cryptocurrencies are all based on blockchain and hence are now being used extensively on the dark web to continue various cybercriminal activities,” said Dr. Pavan Duggal, a veteran Supreme Court attorney and a cyber-law expert, told IANS. Bitcoin and other cryptocurrencies have become the de facto currency on the dark web.
Indeed, the use of crypto assets and cryptocurrencies poses a very difficult situation for law enforcement agencies to trace attribution to a specific dark web cyber activity. “All of this blockchain-enabled technology is going to present a huge challenge to nations, including India,” Duggal said. While the lack of a detailed crypto bill gives some air into the taxation of digital assets, the overall situation is even harder to assess, especially when it comes to illegal uses of cryptocurrencies, experts say. New Delhi-based cyberlaw expert Virag Gupta said crypto assets will gain tremendous traction as Web 3.0 unfolds.
“It will change the landscape of financial fraud and crime as digital assets are a safe haven for criminals. Digital assets can be misused by drug dealers, militant organizations, hawala operators, and money launderers. They pose a serious threat to national security and major challenges to security agencies in India,” Gupta told IANS. India is unprepared for the new wave of blockchain-based cybercrime Cryptocurrencies are also used for cyber terrorism and cyber radicalization,” Duggal said.
Cyber security expert Jiten Jain said that despite imposing a 30 percent tax on digital assets including NFTs, the crypto/NFT market will boom and many companies may try to scam innocent people who don’t have much technical knowledge dispose of them by giving them a mirage of heftier profits. Another concern for Indian law enforcement agencies is the lack of coverage for crypto-based technology crimes under Indian cyber law.
“We must be aware that unless we take effective and appropriate steps quickly, this crypto-based technology will be used extensively by terrorists to attack India’s sovereignty, security and integrity,” Duggal warned. It is time that the legal framework is adjusted accordingly to allow for the capture of crypto or blockchain-based technologies and their misuse.
According to Prime Minister Narendra Modi, democratic nations should work together on cryptocurrencies to ensure they don’t fall into the wrong hands. “Take cryptocurrency or bitcoin, for example. It is important that all democratic nations work together to ensure that what can taint our youth does not fall into the wrong hands,” he said during a virtual keynote address at the Sydney Dialogue organized by the Australian Strategic Policy Institute last November.
Over Rs 4,000 crore in illegal transactions on cryptocurrency exchanges were uncovered by the Enforcement Directorate (ED) in India last year, it said in the same month last year. Serious concerns have been raised about the misuse of digital coins on the dark web for terrorist attacks and drug trafficking by militant organizations, as well as for money laundering and hawala-based transactions – posing a serious threat to national security and a major challenge for security agencies in the country. Rs 4.5 crore cryptocurrency from Delhi Man was fraudulently transferred to the Palestinian Hamas wing.
“After the 2022-23 Union budget, top officials have warned investors about the risks involved but ignored the risks of underworld operations and the money laundering syndicate,” Gupta said. The time has come to develop a more holistic approach in this regard, so that India can not only reap the best benefits from crypto-based technology, but also have an appropriate legal framework in place to effectively regulate the misuse of blockchain-based technology for these purposes of perpetration Cybercrime and cybersecurity breaches, experts said.
(The above story first appeared on LatestLY on February 07, 2022 2:04 PM IST. For more politics, world, sports, entertainment and lifestyle news and updates, visit our website Latestly.com).
source https://www.bisayanews.com/2022/02/07/cryptocurrency-digital-tax-fine-but-what-about-crypto-money-laundering-via-dark-web/
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