US Financial Crimes Enforcement Network (Fincen) set new rules for non-custodial (unhosted)crypto wallets. Fincen asks US exchanges to report transfers of cryptocurrency above $10k to non-custodial (unhosted) wallets to him. Can New Rule Made by FinCEN affect India too?
Non-custodial wallets are private wallets that are maintained by users directly. These wallets are not hosted by exchanges. Exchanges do not have the private keys of such types of wallets. Exchanges also have to complete KYC (complete Know Your Customer) processes for non-custodial wallets above $3k and keep all records related to these wallets.
The new rules will be provided a template for cryptocurrency regulation in India, say, experts. After the Supreme Court lifts the ban on crypto-related payments in 2020. The ban was imposed by the Reserve Bank of India (RBI) in March 2020.
Expert opinion About new Rules
The new rule only affects US individuals and US exchanges. But if the new rule adopted by international bodies( like FATF), it will have a tolerate by India. This will not shift business outside the US. Exchanges are already wary of accepting US customers because of the stringent regulation in the US, and cryptocurrency volumes in the US should be impacted.
With the lack of regulation in India, the enforcement agencies in India frequently asks for the KYC details of customers. There is no framework for cryptocurrency regulation in India.