Crypto, virtual assets brought under money laundering rules

MUMBAI/CHENNAI: Crypto or virtual asset businesses will now be in the ambit of the Prevention of Money Laundering Act, 2002 (PMLA) and Indian crypto exchanges will have to report suspicious activity to the Financial Intelligence Unit India (FIU-IND), the finance ministry has notified. The experts have given a thumbs up to the move by the Centre.

The exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets and transfer of digital assets will be covered under money laundering laws, the notification said.

The safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also be covered.

India is yet to finalise legislation and regulations surrounding cryptocurrencies even as the RBI has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme.

“The G20 Presidency has set the ball rolling and the first salvo has been fired! Now, money laundering rules would apply to the trade of virtual digital assets the exchange of one or more types of virtual digital assets, and the transfer of virtual digital assets. In short, any crypto trade,” Raj Kapoor, founder, India Blockchain Alliance told DT Next.

“Officials will now have more power to keep an eye on movement of these assets outside of the nation,” he added.