India Brings Crypto Transactions Under Prevention of Money Laundering Act – India’s Ministry of Finance published a gazette notifying that certain crypto activities “when carried out for or on behalf of another natural or legal person in the course of business” will be subject to the Prevention of Money Laundering Act, 2002 (PMLA).
The notice states that the Prevention of Money Laundering Act (PMLA) will cover various activities involving virtual digital assets. These activities include exchanging virtual digital assets for fiat currencies, exchanging one or more forms of virtual digital assets, and transferring virtual digital assets.
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Additionally, the safekeeping or management of virtual digital assets, as well as participation in financial services related to the sale and offer of virtual digital assets, will also be included under the PMLA. According to local media, Sharat Chandra, one of the co-founders of India Blockchain Forum, believes that this notification represents a significant move towards regulatory compliance for the cryptocurrency industry.
He was quoted as saying: “It mandates entities dealing in crypto to follow KYC (know your customer), anti-money laundering regulations, and due diligence as followed by banking and other financial entities which fall under the classification of reporting entities under PMLA.”
Sumit Gupta, co-founder and CEO of Indian crypto exchange Coindcx, commented: “Slowly but surely, we are moving towards a regulated crypto ecosystem.” Ashish Singhal, co-founder of crypto investing app Coinswitch, opined: “Finance Ministry’s notification to bring VDA (virtual digital asset) transactions under PMLA is a positive step in recognizing the sector.”
“This will strengthen our collective efforts to prevent VDAs from being misused by bad actors.” India has been actively participating in discussions on cryptocurrency regulation among G20 finance ministers and central bank governors.
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After the conclusion of a G20 meeting for finance chiefs, India requested the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to collaborate on a joint paper to assist countries in developing comprehensive cryptocurrency policies. Finance Minister Nirmala Sitharaman of India has consistently emphasized the need for international cooperation in cryptocurrency regulation.