India Imposes Money Laundering Provisions on Crypto Transactions
The finance ministry of India has announced that crypto transactions will be included under the Prevention of Money Laundering Act, 2002 (PMLA). Noting that the move "is a positive step in recognizing the sector," a crypto insider explained that it will strengthen the efforts of the industry to prevent virtual digital assets "from being misused by bad actors."
PMLA Applied to Crypto Transactions
The
Ministry of Finance, Government of India, published a gazette on Tuesday
notifying that 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).
According
to the gazette notification, the exchange between virtual digital assets and
fiat currencies, the exchange between one or more forms of virtual digital
assets, and the transfer of virtual digital assets will be covered under the
money laundering law. The safekeeping or administration of virtual digital
assets and participation in the purchasing and selling of such assets will also
fall under the PMLA.
Sharat
Chandra, the co-founder of the India Blockchain Forum, told the media that the
notification is a great step towards compliance for the crypto industry. He explained:
"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, said, "Slowly
but surely, we are moving towards a regulated crypto ecosystem."
Ashish
Singhal, the co-founder of the crypto investing app Coinswitch, opined:
"The
gazette notification of the Finance Ministry to include 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."
G20 Crypto Initiatives
The government
of India recently led discussions on cryptocurrency regulation among G20
finance ministers and central bank governors. At the two-day G20 meeting of finance ministers and central bank
governors at Bengaluru on February 24-25, India asked the International
Monetary Fund (IMF) and the Financial Stability Board (FSB) to collaborate on a
joint paper to help countries formulate comprehensive crypto policies. The
Union Finance Minister, Nirmala Sitharaman, has repeatedly called for
international cooperation on crypto regulation.
What is your take on the government of India imposing the Prevention of Money Laundering Act on crypto transactions? Please post your comments.
0 Comments