Updates this week:

• UK officials propose licensing AI due to safety concerns

• EU implements crypto licensing and AML rules

• J.P. Morgan teams up with Indian Banks for blockchain settlements

• Russian Government abandons National Crypto Exchange

• Understanding The Draft Digital India Bill: What to expect

UK officials propose licensing AI due to safety concerns

Officials in the United Kingdom, including Lucy Powell from the Labour Party, have suggested that artificial intelligence (AI) technology should be regulated and require a government license, drawing parallels to the pharmaceutical and nuclear power industries.

They argue that licensing AI developers and implementing safety standards would help address concerns regarding the unregulated use of large language models and mitigate risks associated with bias, discrimination, and surveillance.

OpenAI CEO Sam Altman and US Senator Lindsey Graham have also expressed support for the idea of licensing AI developers. The proposal aims to balance AI innovation with necessary regulations to ensure public safety.

EU implements crypto licensing and AML rules

The European Union (EU) takes a significant step in regulating the cryptocurrency industry by implementing new rules that require crypto service providers to obtain licenses and comply with anti-money laundering (AML) measures.

The regulations aim to enhance transparency, prevent illicit activities, and promote a secure crypto ecosystem. While compliance costs may increase, the long-term benefits of a trustworthy industry outweigh the challenges.

The EU's implementation sets a global precedent for responsible growth in the crypto sector, aligning with international standards and solidifying its position as a leader in cryptocurrency regulation.

J.P. Morgan teams up with Indian Banks for blockchain settlements

J.P. Morgan has joined forces with six major Indian banks, including HDFC Bank, ICICI Bank, and Axis Bank, to conduct interbank dollar transactions on its blockchain-based trading platform, Onyx. The project aims to revolutionize settlement processes by enabling real-time, 24/7 settlement of dollar trades, unlike the current system that takes days and operates only during weekdays.

The pilot project will be conducted over the next few months at GIFT City, India's initiative to establish an international finance hub comparable to Singapore and Dubai. Onyx is J.P. Morgan's digital assets network for wholesale payment transactions.

Russian Government abandons National Crypto Exchange

The Russian government has scrapped its plans to establish a regulated national cryptocurrency exchange and instead aims to regulate multiple crypto trading platforms.

The decision follows the opposition from major Russian crypto companies and lack of support from authorities like the Ministry of Finance. Anatoly Aksakov, a State Duma member, stated that Russia will now focus on creating rules for the management and operation of crypto platforms, allowing businesses to engage in cross-border transactions and potentially bypass sanctions.

The Russian central bank is expected to play a key role in supervising cryptocurrency exchanges, and a regulatory framework will be developed under the bill on experimental legal regimes.

Understanding The Draft Digital India Bill: What to expect

The Indian government has released a draft of the Digital India Bill, outlining its vision for digital governance and data protection in the country. The bill aims to establish a comprehensive legal framework for regulating various aspects of the digital ecosystem in India.

The bill highlights the focus on data protection, privacy, and cybersecurity, as well as the establishment of a Data Protection Authority to oversee and enforce compliance with the legislation.

The draft bill also emphasizes the promotion of digital literacy, the facilitation of e-governance services, and the encouragement of innovation and entrepreneurship in the digital space. It underscores the government's commitment to harnessing the potential of digital technologies for the betterment of Indian society and the economy.

The release of the draft bill has sparked discussions about its potential impact on various stakeholders, including businesses, individuals, and government entities. It is seen as a significant step towards ensuring a secure and inclusive digital environment in India.

As the bill undergoes further review and potential revisions, stakeholders will closely monitor its progress and provide feedback to shape its final form. The Digital India Bill holds the potential to reshape India's digital landscape and strengthen the country's position in the global digital economy.

Weekly Explainer

Cryptographic Hash Functions

Cryptographic hash functions are mathematical algorithms that take an input (data) and produce an output that is a fixed-size string of alpha-numeric characters, known as a hash value or hash code.

An easy way to understand cryptographic hash functions is to think of them as "digital fingerprints." Just like a fingerprint uniquely identifies a person, a hash function generates a unique output for each unique input. Even a slight change in the input data will result in a completely different hash value.

For Example-

Let's consider a simple hash function that takes any text and produces a 32-character hash code. If we input the sentence "I love blockchain technology," it might generate a hash value like "37ab2c5e0f16d99f4d5a8c8f269d7ca8." If we change the sentence to "I love blockchain technologies," the hash value becomes "6fe2a1e8f51ed21e7a1d71f56d4a6789."

Cryptographic hash functions are crucial in blockchain because they provide data integrity and immutability. Once data is hashed and added to the blockchain, any tampering or modification of the data will result in a completely different hash value, alerting the network of the unauthorized change. This ensures the security and trustworthiness of blockchain-based systems.

To learn more about such concepts, visit

Article in Spotlight

Money Laundering Reporting Obligations For Indian Web3 Entities

After years of uncertainty and refusal to acknowledge Crypto and Web 3 companies, India has come out with reporting obligations under the Prevention of Money Laundering Act, 2002 (PMLA). We dive in to understand why this is a seminal moment and what this means for businesses operating in India and the eco-system as a whole.

This article will cover the following:

a. Why India is vital to the Web 3 ecosystem.
b. What are the new regulations?
c. Which businesses would fall under this ambit?
d. What compliances do the businesses have to undertake?
e. Implications & Takeaways

→ Why India is vital to the Web 3.0 ecosystem

There is no doubt that the heavy-handedness of Indian regulators has led to a slowdown in the Indian ecosystem, you can read about the same here:

India has had a long history of not recognizing crypto-related businesses, however the tide may slowly be turning.

India is uniquely positioned to be a major player in the Indian crypto market, many such as Balaji Srinivas have stated the same. India ranks 3rd in terms of Web 3 workforce in the world and is uniquely positioned to be a major player in the global Web 3.0 market for years to come. There is data to support this claim:

i. India ranks 3rd in terms of Web 3.0 workforce in the world right now.

ii. India will have the largest workforce in 2 years.

iii. Some of the most prominent Web 3.0 companies are founded by/run by Indians (Ex. @0xPolygon).

All this has happened without the government legitimizing the workforce, however, this may be the first step in moving towards a regulated ecosystem in the country.

→ What are these new regulations?

Businesses dealing in Virtual Digital Assets (VDA) must now follow the reporting standards under PMLA, bringing them on par with other reporting entities such as banks, securities intermediaries, payment system operators, etc.

→ Which businesses would fall under this ambit?

i. Exchanges dealing in Virtual Digital Assets (VDA) & fiat

ii. Exchanges dealing in VDA’s

iii. Businesses that enable transfer of VDA

iv. Businesses that enable safekeeping of VDA

v. Businesses that enable control of VDA

v. Instruments enabling control over VDA vi. Financial services related entities vii. Sale of VDA

To read more about the compliances, implications and takeaways from this article, visit our website here.

Crypto Chronicles- Stories from the wild world of digital assets

🕵️ Unveiling the Cryptic Exploits: An Unlikely Tale of Young Crypto Pioneers 🚀

Prepare to be amazed by an astonishing revelation in the realm of cryptocurrency. Enter the unlikely heroes of this tale: school kids! Recent reports have shed light on their unexpected foray into the world of crypto phishing, wielding a powerful weapon known as the NFT drainer.

These young minds have been infiltrating fake websites with this code called NFT drainers, patiently awaiting their unsuspecting prey. Once someone connects their wallet, the drainer swiftly drains it of all its valuable NFTs and tokens, leaving victims in disbelief.

The magnitude of their exploits is truly staggering. Millions of dollars have been siphoned from vulnerable wallets, with thousands of individuals falling victim to compromised security. What's even more astounding is the revelation that a significant majority of these daring attackers are under the age of 18.

How did these kids acquire such prowess? Rumour has it that a hidden marketplace caters to their MO. Through underground channels, they engage with skilled developers, striking deals. Once equipped with the drainers, these young prodigies embark on their own thrilling escapades.

Who could have foreseen such audacity from the youngest players in the crypto world?

Thank you for reading!

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Disclaimer: None of this constitutes legal advice, if you have a specific query please feel free to reach out to us.