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In India, where the uptake of cryptocurrencies is among highest in world, there is a pressing need to have a streamlined crypto tax regime, constructive and adaptive regulatory environment. Discuss.

Topic: basics of cyber security; money laundering and its prevention.

5. In India, where the uptake of cryptocurrencies is among highest in world, there is a pressing need to have a streamlined crypto tax regime, constructive and adaptive regulatory environment. Discuss. (250 words)

Difficulty level: Moderate

Reference: Indian Express

Why the question:

On Monday, founder of the collapsed crypto exchange FTX, Sam Bankman-Fried was arrested in the Bahamas. FTX crashed almost overnight after failing to meet a run on deposits, throwing the crypto industry into its latest crisis.

Key Demand of the question:

To write about the need to tax and regulate cryptocurrency.

Structure of the answer:

Introduction: 

Begin the answer by defining cryptocurrency with examples.

Body:

First, write about the proliferation of cryptocurrencies in the Indian economy and their extent.

Next, write about the challenges associated with cryptocurrencies – taxation, regulation, preventing money laundering etc.

Next, write about the steps that are needed to overcome the above-mentioned challenges.

Conclusion:

Conclude by writing a way forward.