Disclosure of crypto holdings not a step towards legitimacy – Mint

Disclosure of crypto holdings not a step towards legitimacy – Mint

The government’s decision to make companies disclose their cryptocurrency trades and holdings from 1 April is not a prelude to legitimizing virtual currencies, a government official said.

The government last week amended a schedule of the Companies Act, mandating disclosure of details of cryptocurrency trade, profit or loss from these transactions, the holding on the reporting date and details of deposits taken from anybody for trading in virtual currencies.

The disclosure requirement raised expectations that it was a step towards recognizing cryptocurrency as a separate asset class. However, this move had little to do with cryptocurrencies’ legal status as an asset.

“The government has received complaints about some entities luring people into giving deposits to trade in cryptocurrency. The intention (behind the reporting requirement) is to bring more transparency into who holds virtual currency, how much is the holding and the extent of the transactions taking place. This information will be available to everyone,” the official cited above said.

To be sure, once businesses report their virtual currency assets and transactions, regulators too will enter the picture. The finance ministry recently said it will decide on proposals made by an inter-ministerial panel for a possible legislation on cryptocurrency.

The official position so far on the matter is that all private cryptocurrencies, except any cryptocurrency issued by the State, be