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The union government will probably give crypto holders a deadline to declare their assets and meet any new rules, Bloomberg reported citing people familiar with the matter.

Livemint has earlier reporter that capital markets regulator Sebi will likely be appointed to oversee cryptocurrencies as authorities look to classify them as financial assets.

The government is all set to introduce 'well consulted' cryptocurrency Bill that seeks to regulate cryptocurrencies rather than an outright ban which may affect millions of crypto holders.

The Bill is likely to use the term ‘cryptoassets’ rather than ‘cryptocurrencies,’ and won’t refer to the central bank’s plan to create its own digital currency, sources said.

Any violators could be fined as much as 20 crore ($2.7 million) or imprisoned for 1.5 years, according to the proposals, sources told Bloomberg.

The government may also consider prescribing a minimum threshold for investing in crypto assets to safeguard small investors, Bloomberg had reported earlier.

The union government has no plans for boosting the cryptocurrency sector in the country either, the ministry of finance told Parliament on Monday.

Finance Minister Nirmala Sitharaman said last week the government has reworked an earlier bill -- which had proposed banning all private cryptocurrencies -- to factor in new developments. There was no proposal to recognize Bitcoin as a currency in the country, she added.

The crypto market in India has grown 641% in the year through June 2021, according to an October report from Chainalysis, a crypto-analysis firm. The government is now considering taxing gains from digital currencies, and there have been calls to impose stricter rules for transactions in virtual coins due to the unregulated nature of the business.

Earlier this month, Modi held a review meeting on digital currency and discussed that unregulated crypto markets can’t be allowed to become avenues for money laundering and terror financing.

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