Blockchain Technology & Cryptocurrency Plenary 8 Blockchain Technology & Cryptocurrency April 28, 2018 IFA, New Delhi

BLOCK CHAIN TECHNOLOGY-CRYPTOCURRENCY Chairman : Mukesh Butani , Advocate Moderator: Kuntal Dave, Nanubhai Desai & Co. Panelist: Sonia Mathur, Sr. Advocate Shikha Mehra, Global Jindal Meyyappan Nagappan, Nishith Desai & Associates Place : The Lalit, New Delhi Date : 28th April, 2018 Time : 03:45 PM – 05:00 PM

Contents What is Blockchain Technology & Cryptocurrency? Existing Width and coverage of Crypto Currencies. Recent Global Developments. Regulatory and Tax treatment outside of India. India’s Position – Regulatory Framework. Short Term Challenges at India. Long Term Impact of Blockchain. 28/04/2018

What is Blockchain technology & Cryptocurrency? How Internet of Things is going to change how we do business: Insurance Business Retail HR Management Agriculture (supply chains) Business-Process Management Stock Balance Inventory Tourism Health Care Transport and Car Industry Energy Industry Manufacturing More Data (and faster) 28/04/2018

What is Blockchain technology & Cryptocurrency? Cont’d Introduction to Cryptocurrency – Blockchain: Blockchain – A decentralized, trustless ledger (list of transactions), on which only additions can be made • The ledger history can never be changed • All computers on the blockchain have the ledger Cryptocurrency – A virtual currency that uses encryption to prevent “double spending” 28/04/2018

What is Blockchain technology & Cryptocurrency? Cont’d The goal of Blockchain is to: Make each digital asset identifiably unique(through cryptography), Create a record that is trusted (a ledger), Without a central issuer (decentralized), And form consensus among computers of which transactions are valid. P2P computer nodes 28/04/2018

What is Blockchain technology & Cryptocurrency? Cont’d Transaction in a Blockchain: 28/04/2018

What is Blockchain technology & Cryptocurrency? Cont’d Cryptocurrency – Market Perspective: 28/04/2018

What is Blockchain technology & Cryptocurrency? Cont’d Cryptocurrency – Market Perspective: 28/04/2018

Recent Global Developments Source:queenwiki.com 28/04/2018

Recent Global Developments Cont’d Major Events – Q1 Global Overview: Source:News.Bitcoin|Techcrunch|CNBC|NewsBTC|BBC 28/04/2018

Recent Global Developments Cont’d Major Events – Key Regulatory Headlines: 28/04/2018

Recent Global Developments Cont’d Tax Implications Worldwide: Outlawed Bitcoins in early February 2018. RUSSIA Trading in Cryptocurrencies illegal. VIETNAM Tax enforcement consequences of digital currency. SWEDEN No guidance has been issued to Taxpayers completing transactions in Cryptocurrency. SWITZERLAND Has remained curiously mum so far on the subject. AMERICA Standard Tax Rules will apply to emerging Tax payment systems (Cryptocurrency). On 3rd April it Launched new Cryptocurrency Exchange Regulations. AUSTRALIA Existing tax rules apply to digital currency transactions. CANADA 28/04/2018

Recent Global Developments Cont’d Tax Implications Worldwide: Profits from trading in Bitcoin are liable to tax, just like profits from other assets. NORWAY At present it has no legislation directly regulating bitcoins and other virtual currency. HONG KONG As of 2017, Bank of Thailand is open to bitcoin provided proper controls are in place. THAILAND Profits & losses on Cryptocurrency are subject to capital Gain tax. UNITED KINGDOM In 2017 the Country’s Government officially recognized bitcoin and digital currency as a method of payment. JAPAN Businesses that deal with bitcoin currency exchange will be taxed based on their bitcoin sales. SINGAPORE While not illegal in the country Korean Authorities will prosecute illegal activities involving Bitcoin. SOUTH KOREA 28/04/2018

India’s Position – Regulatory Framework RBI has banned Regulated Entities From Dealing In Virtual Currencies Reserve Bank of India wants its own digital currency The Finance Minister stated in Budget 2018 that Cryptocurrencies are not valid tender Cryptocurrency Investors were Sent Tax Notices by I-T Department 28/04/2018

Short Term Challenges at India? Key Concerns Unique Identifiers Data Privacy Confidentiality Integration with existing System FEMA Is it a ‘Currency’/ ‘Foreign Currency’? Transaction of Bitcoin - Current Account Transaction? Taxation Gain from Sale of Bitcoin – Capital Gain or Business Income? Computation? Earned during ‘Mining Process’ – Taxable? Loss of ‘Bitcoin’ – Business Loss? Situs of Bitcoin? Significance of ‘Online Wallet’? General Is it Legal in India? Impact of ban of Cryptocurrency by Government of India? Is it Goods or Service? Is it a Prepaid Instrument? Is it Payment for Import? 28/04/2018

Long Term Challenges of Blockchain How can Blockchain address Transfer Pricing Issues? How can Blockchain address the issue of Transparency and Beneficial Ownership? Impact of Blockchain on the disputes and Litigation? 28/04/2018

Q & A 28/04/2018

Intellectual Property Financial transaction Closing Remarks. Influence of Blockchain on Litigation: Possibility of using smart contracts with the use of blockchain, which will do away with traditional requirements of legal agreements. Smart Contracts With the use of IP artist and musicians can get better income and recognition. Intellectual Property Need for Lawyers specializing in Blockchain Laws/Digital Laws. Blockchain Law Lesser dispute in property related cases with the use of distributed ledgers. Property Rights Easily track the custody of documents with the use of digital ledger. Chain of Custody More challengers for lawyers to track anonymous payments through Cryptocurrency by criminals. Financial transaction Save space by using blockchain technology to preserve the notary documents digitally. Notary Public 28/04/2018

THANK YOU! 28/04/2018