Indian crypto space is huge, but how transparent is it?

Though cryptocurrency has vast potential for growth, investor safety remains a concern (Image: Reuters)

India seems to be miles ahead of the world when it comes to upping its ante on cryptocurrency adoption! At just over 10 crore, India seems to be comfortably and hugely outpacing the globe when it comes to the number of cryptocurrency investors in the country, preceded by the US with 2.74 crore investors and Russia, which stands at 1.73 crore users, per reports by broker platform Brokerchooser.

The data, tweeted by Zerodha founder Nithin Kamath, also went on to highlight India’s dominance in this space as the fifth-largest country in terms of the total population being cryptocurrency owners and the seventh most crypto aware country in the world. What’s more, India also registered a massively significant yearly growth of about 651 percent in terms of cryptocurrency reception in the country.

And the saga does not stop here. Various reports suggest that India ranks second out of 154 countries when it comes to cryptocurrency adoption and even the country's crypto curiosity metric of maximum internet searches at 36 lakh is second only to the US' (69 lakh) over the last 12 months.

While these figures only serve to strengthen India’s enthusiasm about crypto, under the umbrella of government and regulatory ambiguity, there also brews opaqueness and a lack of clarity about crypto, when seen from a perspective of investor transparency.

While cryptocurrency is quickly becoming a vast ocean of opportunities, experts opine that our visions around it in the sphere of investor safety perhaps remain myopic, similar to that of a lake. And to swim in this rapidly growing ocean, there clearly needs to be more transparency, more visibility, and more clarity, and more robustness of investor protection, they say.

In what is perhaps a pioneering move for the industry, crypto exchange WazirX has launched its first-ever transparency report that lays bare various regulatory concerns like requests received from law enforcement agencies (LEAs), the nature of information requests, user verification processes, and the provisions for customer support between April-September 2021 and which it plans to make a semi-annual release. Simultaneously, it also announced the launch of a blockchain research and analysis platform, Blockchain Papers.

Per the report, the company had received almost 377 requests from various law enforcement agencies (LEAs), namely 38 from foreign LEAs and 339 from Indian LEAs. The company reportedly responded to and met with all requests, taking its compliance rate to a full 100 percent. Notably, all the cases so received were criminal in nature.

The report further elaborated that between the stipulated time period, almost 14,469 accounts were locked, segregation of which is skewed towards customer requests to close accounts (90 percent), and the remaining have been locked due to payment disputes or ongoing investigation by LEAs.

The push towards transparency also comes at a time when crypto exchanges like WazirX (8.3 million) and CoinSwitch Kuber (11 million) have surpassed established platforms like Zerodha (7 million).

Commenting on the development, Nischal Shetty, CEO, and Founder, WazirX said, “The transparency report is very important for us. Milestones like this are going to reshape the regulations and perception towards crypto in India. We have been recognised as a unicorn, looking at our performance, market cap, and volumes. However, evaluation is not intrinsic for us. Initiatives such as the transparency report add credibility to the ecosystem and make the crypto world look more appealing to outsiders. We aim to look at the bigger goals like positive regulations and consider ourselves paving the way to it through innovative approaches."

Adding to the same, Aritra Sarkhel, Director of Public Policy, WazirX stressed the exchanges' commitment "to bring more clarity and build transparency for our users and policymakers in India around everything crypto."