IAMAI shuts down India's sole crypto advocacy body BACC

Representative image.

At a time when a number of crypto exchanges are freezing their assets and new TDS regulations are being levied on Indian crypto traders, Blockchain and Crypto Assets Council (BACC), the country’s only crypto advocacy body, has been disbanded, according to sources cited by CoinDesk. 

The Internet and Mobile Association of India (IAMAI), the parent body of BACC, took the decision in light of uncertain regulatory environments, according to an official statement sent over Whatsapp, accessed by CoinDesk.

IAMAI said in the report that they would rather direct their limited resources towards emerging digital sectors which make an immediate and direct contribution to India, such as strengthening financial inclusion and promoting a Central Bank issued Digital Currency (CBDC).

The decision, which was reportedly taken without consultation with BACC officials, was made by the IAMAI to protect its reputation which was being hampered by a “lack of maturity” shown by crypto founders, sources familiar with the matter told CoinDesk.

The move, which was termed as a collective decision in a video-conferencing call with industry stakeholders and crypto exchange representatives, will see the IAMAI distance itself from advocacy for crypto exchanges, a person on the call said.

Crypto lending companies recently faced the flak for promoting products such as the Crypto FD without educating the common investors enough about the risks involved with the evolving asset class. Crypto founders not addressing these risks adequately, despite repeated directions by the finance ministry, was one of the reasons for the IAMAI to close its doors to crypto exchanges, one of the sources argued. 

Differences between the IAMAI and BACC had emerged earlier regarding the way to deal with the new taxes on crypto introduced by the government with some industry participants wanting to legally challenge the measures, a challenge IAMAI did not support, according to CoinDesk.

The move to dissolve India’s only crypto advocacy council comes at a time when crypto exchanges are suffering from a liquidity crunch due to a 1 percent TDS introduced on all crypto trades by the government, some exchanges freezing deposits and the declining value of cryptocurrencies in the last few months.