Govt of India wants Crypto Exchanges and VPNs to Retain 5 Years of Data
What happened:
Under the proposed laws, VPN service providers and cryptocurrency exchanges would be required to collect sensitive personal data as well as patterns of user ownership. The Indian Computer Emergency Response Team (CERT-in), which is part of the Ministry of Electronics and Information Technology, published a new rule on Thursday mandating crypto exchanges, VPN providers, and data centers to keep client data for up to five years. According to the recently announced regulation, crypto exchanges operating in India would be forced to keep customers’ names, ownership patterns, contact information, and other data.
Crypto exchanges and VPN service providers are also required to notify any cyber incident within six hours of its occurrence and provide any data gathered to authorities upon request. According to the official directive, “the service provider/intermediary/data center/body corporate is mandated to take action or provide information or any such assistance to CERT-In when required by order/direction of CERT-In for the purposes of cyber incident response, protective and preventive actions related to cyber incidents.”
Threats and Concerns:
Consumer information required under this criterion is sensitive, according to Kazim Rizvi, Founding Director of The Dialogue, a blockchain think tank, and may prohibit customers from adopting cloud services. “The sensitive client information demanded under this criterion may preclude consumers from accessing the VPN, crypto, and Cloud services in question,” Rizvi said.
According to the public policy entrepreneur, the Indian government should avoid “burdening” crypto, VPN, and cloud players. The EasiFi CEO concurred with Rizvi that the CERT-In rule might harm the long-term economic prospects of the affected sectors. According to the Indian government, these guidelines would take effect after 60 days.
Along with crypto exchanges, custodian wallet providers have been added to the list of virtual asset sector firms that would be affected by this rule.
New legislation has been enacted in India to make virtual digital asset transfers more traceable. The government intends to make it impossible for anybody to launder money or sponsor terrorists via digital assets.
Conclusion/What to Expect?
It would be interesting to see if any crypto companies develop India-specific adjustments that conform to the new criteria issued by the Indian government, or if they intend to withdraw service from the Indian market completely. Indian business organizations are a big source of revenue for many crypto service providers due to the flourishing IT industry. Surely, quitting their Indian customer base is not an option for many of these organizations.