India: crypto exchanges will have to store user data for 5 years

Things are moving in India! – India’s Computer Emergency Response Team (CERT-in), under the Ministry of Electronics and Information Technology, has issued a new directive. Therefore, the exchangesvirtual private network (VPN) providers and data centers will need to store a wide range of their users’ data for five years. These new guidelines would require them to collect critical private information from customers.

A new directive for Indian exchanges

Under the recently released directive, exchanges operating in India will have to store data of their customers. This concerns, among other things, customer names, ownership models, contact information and various other data.

Crypto exchanges and VPN service providers will also need to report any cyber incident. They will have to do this within six hours of its occurrence and hand over the data collected to the authorities.

“When required by order/direction of CERT-In, for the purposes of cyber incident response, protective and preventive actions related to cyber incidents, the service provider/intermediary/data center/legal person is mandated to take action or provide information or any assistance to CERT-In. »

Excerpt from the official Indian directive

The new guidelines will come into effect on June 22. They could force many VPN service providers and crypto platforms to shut down. Indeed, some rely heavily on privacy and do not collect or store any critical user data. They will have to cease their operations.

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What interest for cryptocurrencies in India?

CERT-in says the new guidelines are aimed at helping them take action against cybercrimes. However, the data they ask the platforms to store and transmit pose a problem with respect to privacy users.

“Our government wants to control people’s privacy and our constitution doesn’t allow it. But to be honest, no one in India is very aware of personal data. »

Testimony of a dismayed user

Some exchange owners have welcomed this step. They claim it will help prosecute tax evaders.

Cryptocurrency users will not be able to easily launder their money on exchanges in India.

“It’s a good decision and it helps crypto players to have a clear idea of ​​the data they would store. The data would help prosecute tax evaders and any crime using crypto. »

Sathvik Vishwanath, CEO of Unocoin

At this stage, the application of these new rules is not very clear. No one knows if they would apply only at exchanges operating in India or also to foreign platforms also offering their services to Indians. However, looking at previous guidelines, this may well be applicable to all providers.

Crypto regulation is on in the country

Indian Finance Minister Nirmala Sitharaman knows the potential of crypto and blockchain. The security issues surrounding him are also no secret to him.

“Blockchain itself is so full of potential not only in the area of ​​payment, but also in very many other areas (…) Our intention is in no way to harm that (…) It can also be manipulated for less desirable purposes, whether to launder money or to lead to the financing of terrorism. »

Nirmala Sitharaman, Indian Finance Minister

India regulates cryptocurrencies.

KYC processes and data will need to align with the guidelines of three entities: the Reserve Bank Of India (RBI), the Securities and Exchange Board of India (SEBI) and the Department of Telecom (DoT). Crypto businesses must also appoint a point of contact for CERT.

Speaking at a public forum, Nirmala Sitharaman asked for a “collective global action” for effective regulation of this dynamic technology.

“If there is impatience out there in the world, what are you doing about crypto? I can understand the impatience, but I’m sorry, that’s how it’s going to be. »

Nirmala Sitharaman, Indian Finance Minister

The new guidelines on data collection come at a key time for cryptocurrencies in India. The regressive crypto tax policy in the country has already resulted in a strong decline in trading volume and user activity on Indian exchanges.

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India: crypto exchanges will have to store user data for 5 years

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