It seems that Indian regulators have begun to establish a comprehensive surveillance system for the cryptocurrency market. Looking at the new rules announced by the Financial Intelligence Unit (FIU) in January, a quite strict identity verification process will be implemented.

The burden on users is also increasing. In addition to verifying liveliness through live selfies, submitting multiple documents such as passports, driver's licenses, and local identification cards will become mandatory. Bank account verification will also be conducted with a small charge of 1 rupee. For high-risk customers, enhanced reviews will be conducted every six months.

A significant restriction for Indian cryptocurrency exchanges is the ban on ICOs (Initial Coin Offerings) and the prohibition of mixers and tumblers that make transaction tracing difficult. All platforms are required to register with the FIU, report suspicious transactions, and retain user data for five years.

The background of these guidelines is clearly aimed at combating money laundering and terrorist financing. Authorities see ICOs and ITOs as presenting "highly complex" risks.

India classifies cryptocurrencies as "virtual digital assets" under income tax law, allowing citizens to buy and sell through the FIU registration platform, but their use as a means of payment is not permitted.

Looking at these regulatory developments, it becomes clear how cautious India is regarding cryptocurrencies in such a large market.

Meanwhile, the Trump-related World Liberty Financial's WLFI token has recently been quite volatile. Lending strategies on the Dolomite DeFi platform caused controversy, resulting in a 12% drop. This was due to the company borrowing stablecoins against its own governance tokens, which strained the liquidity pool.

The company claims that as an "anchor borrower," it generates yields for others and can avoid liquidation by adding more WLFI. However, critics are raising concerns that this creates a cycle of increasing systemic risk. The falling price of WLFI reduces borrowing capacity, and collateral is concentrated in depreciating tokens, while the Treasury's buybacks are incurring unrealized losses.