Industrial cooling fans operate to thermally regulate illuminated mining rigs at the CryptoUniverse cryptocurrency mining farm in Nadvoitsy, Russia | Representational Image | Photographer: Andrey Rudakov | Bloomberg
Industrial cooling fans operate to thermally regulate illuminated mining rigs at the CryptoUniverse cryptocurrency mining farm in Nadvoitsy, Russia | Representational Image | Photographer: Andrey Rudakov | Bloomberg
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New Delhi: India’s cryptocurrency and blockchain industry professionals have started a cryptocurrency fund that aims to help the country in its fight against the Covid pandemic. Within three days, the fund claims to have collected donations worth Rs 22 crore in cryptocurrencies, including 1 Bitcoin worth over Rs 40 lakh from Australian cricketer Brett Lee.

Lee said he is donating the amount to “help with the purchase of oxygen supplies”.

“India has always been like a second home for me…I’d like to donate 1 BTC (Bitcoin) to Crypto Relief to help with the purchase of oxygen supplies for the hospitals across India,” Lee said in a statement tweeted Tuesday.

In his statement, Lee also shared the website link for the crypto fund set up by Indian professionals in the industry.

His tweet commended fellow Australian cricketer Pat Cummins for donating 50,000 dollars to aid India’s Covid relief efforts.

India currently has no specific regulations for cryptocurrencies.

Earlier this year, the Narendra Modi government had halted a bill to ban cryptocurrencies, with Finance Minister Nirmala Sitaraman saying people will be given a “window” to experiment with cryptocurrencies.

According to Nischal Shetty, founder of Mumbai-based cryptocurrency exchange platform WazirX, cryptocurrency donated within India can be exchanged for Indian Rupee but the industry is “still exploring” what the process should be for using such funds coming from outside India.

All foreign donations are governed under two laws in India — the Foreign Contribution (Regulation) Act, 2010, which regulates all such contributions, and the Foreign Exchange Management Act, 1999, which regulates inflow and outflow of foreign exchange.

An email sent to Nitin Wakankar, Director General (Media & Communication) in the Ministry of Home Affairs, seeking clarity on FCRA-approved NGOs receiving cryptocurrency donations especially from outside India did not receive a response. A source in the home ministry said the matter comes under the finance ministry.

An email sent to the finance ministry’s media section did not elicit any response.


Also read: These 2 Indian tech gurus are fighting to save crypto from being killed by bureaucracy


How the crypto fund started

The fund was announced on 24 April by Sandeep Nailwal, co-founder of Polygon, a Bangalore-based company working on blockchain solutions.

“Can’t take this sitting down anymore, I am going to run a Covid relief campaign in lieu of what’s going on in India,” Nailwal tweeted.

The tweet thread added that the cryptocurrency will be used to fund oxygen, food, and “probably vaccines”.

The fund is accepting donations in the form of several cryptocurrencies like Bitcoin, Ether, Dogecoin, Tron, Cosmos, Tezos, Solana, Litecoin, and Ripple.

Nailwal, however, acknowledged there could be some regulatory hurdles. “I already got a few people pinging me that Regulatory things would be tough on this, it’s not easy to give money, even for social causes…Whatever happens we will handle it, lets not let it stop us from doing what is right.”

The fund has collected about $3 million, which is worth over Rs 22 crore, Nailwal told ThePrint in a WhatsApp message.

Vitalik Buterin, co-founder of Ethereum, a blockchain supporting Ether cryptocurrency, donated over 600,000 dollars to the fund in two types of cryptocurrencies.

Possible regulatory hurdles

While Nailwal predicted regulatory hurdles, he also said it could get sorted.

“The Entity to convert funds [into fiat currency is] all set…First Compliant receiver of this fund with FCRA [Foreign Contribution (Regulation) Act] approvals has been finalized…” he posted in his tweet thread.

However, referring to this crypto fund, a 27 April email newsletter from law firm Nishith Desai Associates said: “The regulatory compliance of the initiative should be assessed closely and structured accordingly. Contributions should be made and brought into India in a manner compliant with the Foreign Contribution (Regulation) Act, 2010, which regulates all donations made by foreign sources, and the Foreign Exchange Management Act, 1999, which regulates inflow and outflow of foreign exchange.”

However, there is a problem in tracking what donations come from outside India, since cryptocurrency payments are structured so that identity and location of the fund sender is anonymous.

“If the crypto is donated from within India then it’s straightforward. You can sell the crypto for INR on an exchange like WazirX and then use the INR for buying the necessary supplies to help with covid relief,” Nischal Shetty of WazirX told ThePrint.

Speaking about the process for using cryptocurrency funds from outside India, he said the industry is “still exploring this aspect”.

(Edited by Sanghamitra Mazumdar)


Also read: Why India shouldn’t use blockchain for GST. It will make planet hotter, for one


 

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2 COMMENTS

  1. It’s very Humane in donations but In form if CryptO it’s very RISKY!! In midst of Pandemic sounds like a unknown Pandora box jus a another GIMMICK to launch such digital money as National like US aren’t prepared for this Drastic Change before any such Action some Guide lines or Governing Body ( RBI& DOF/ Unions of BANKS) To look after these Transaction/ Transfer domestic or International in order to Counter any future issues / frauds!!

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