Crypto operations, virtual assets under the Money Laundering Act

Exchange and transfer of virtual digital assets are also subject to PMLA laws. (representation)

New Delhi:

The Ministry of Finance announced today that cryptocurrency transactions will now fall within the ambit of money laundering regulations. In a notification, the government said that engaging in transactions involving virtual digital assets would be subject to the Prevention of Money Laundering Act (PMLA). The move is the latest move by the government to strengthen its oversight of digital assets.

In the newspaper, the ministry warned investors against “participating in and providing financial services related to the offering and sale of a virtual digital asset by the issuer.”

Exchange and transfer of virtual digital assets also fall under PMLA laws, the notification said.

According to the Income Tax Act, “virtual digital asset” means any information, code, number or token (not Indian currency or foreign currency) created by cryptographic means or otherwise and may be called by any name.

The Enforcement Directorate, which has powers to investigate money laundering and forex violations, is already investigating crypto companies, including exchanges CoinSwitch Kuber and WazirX.

India’s latest move follows a global trend to require digital asset platforms to “follow anti-money laundering standards similar to those followed by other regulated entities such as banks or stockbrokers,” said Jaideep Reddy, a consultant at law firm Trilegal.

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