The Indian Computer Emergency Response Team (CERT-in), which is part of the Ministry of Electronics and Information Technology, issued a new rule requiring crypto exchanges, VPN providers, and data centers to preserve a wide range of customer data for up to five years.
Customers’ names, ownership patterns, contact information, and other data will be required to be stored by crypto exchanges operating in India under the recently released guideline.
Crypto exchanges and VPN service providers must also notify any cyber incident within six hours of its occurrence and provide the collected data to authorities if requested. The official directive was as follows:
The service provider/intermediary/data center/body corporate is mandated to take action or provide information or any such assistance to CERT-In as requested by order/direction of CERT-In for the purposes of cyber incident response, protective and preventative actions linked to cyber incidents.
The new directives will take effect on June 22, and many VPN service providers and privacy-focused crypto platforms that do not collect or keep crucial user data may be forced to close their doors.
The new rules, according to CERT-in, are designed to assist them to respond to cybercrime within six hours, but the amount of data they are requiring platforms to preserve and pass over has raised eyebrows due to user privacy concerns. One user said, “
Our government wants to manage people’s private lives, which our constitution forbids, but to be honest, no one in India is very concerned about personal data.
Some crypto exchange owners, on the other hand, applauded the move, claiming that it will aid in the prosecution of tax evaders. Sathvik Vishwanath, CEO of Unocoin said :
This is a smart move that will provide clarification to crypto participants regarding the data they will be storing.” The information would aid in the prosecution of tax evaders and other crypto-related offenses.
At this time, it is unsure if the new laws would apply exclusively to crypto exchanges based in India or to overseas exchanges that offer their services to Indians. However, based on previous crypto guidelines, it is possible that it will apply to all platforms.
Also Read: To Circumvent Transaction Channel Constraints: Indian Crypto Exchanges have gone P2P
The new data collecting instructions come at a time when India’s regressive crypto tax policy has already resulted in a significant drop in trading volume and user engagement on crypto exchanges in the nation.
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