Fate of over $100M worth of crypto investments undecided as India ponders crypto ban bill

The recent cryptocurrency ban bill that has been submitted to the Indian government could put a question mark on $111 million that has been invested in various initial coin offerings (ICOs) conducted in the country since 2016.

The inter-ministerial committee which was set up by the Indian government in 2017 has officially submitted its report and draft bill to the government. The bill essentially seeks to criminalize mining, generating, holding, selling, dealing, issuing, transferring, disposing or using cryptocurrency.

Those found to be engaging in such cryptocurrency-related activities “shall be punishable with fine or with imprisonment which shall not be less than one year but which may extend up to ten years, or both,” the bill reads. Reuters reported that the committee has recommended a fine of up to 250 million rupees ($3.63 million) along with the jail term.

Citing data from industry intelligence firm InWara, The Times of India reported that investors have pumped around $111 million in Indian ICOs between 2016 and April 2019. Individual crypto holdings have been pegged at around $500 million from thousands of investors.

Investors are particularly alarmed as the bill states that “the form and manner of declaration and disposal of such cryptocurrency” may be prescribed at a later date.

Citing data from Traxcn, the report said angel, PEs and VCs have invested $18.4 million in Indian cryptocurrency startups between 2016 and 2019 (YTD). Crypto firms that have secured private investments include Koinex, Unocoin, RentalCoins, CoinSecure, and Zebpay.

Meanwhile, the country’s apex court, the Supreme Court of India, recently rescheduled the crypto case hearing that was originally set on July 23 to July 25. However, Crypto Kanoon, a provider of Indian crypto regulatory news, said in a tweet that the case was not heard even on July 25:

The current indecisive and unfavorable regulatory environment in the country has seen a number of crypto companies pulling the plug on their operations. This includes Koinex, Zebpay, Coinome, and more recently CryptoKart.