India’s Ministry of Finance has announced that crypto transactions will be covered by the Prevention of Money Laundering Act of 2002 (PMLA). Noting that the move is “a positive step in recognizing the sector,” crypto officials explained that it will strengthen the industry’s efforts to prevent virtual digital assets from being “misused by the bad guys.”
India Applies PMLA to Crypto Transactions
India’s Ministry of Finance issued a gazette notification on Tuesday notifying that certain cryptographic activities “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 of 2002 (PMLA).
According to the notice, the exchange of virtual digital assets for fiat currency, the exchange between one or more forms of virtual digital assets, and the transfer of virtual digital assets are subject to the Money Laundering Act. In addition, participation in financial services related to the storage or management of virtual digital assets or the offering or sale of virtual digital assets would also be covered by the PMLA.
Sharat Chandra, co-founder of the India Blockchain Forum, told local media that the notification is a major step toward compliance for the crypto industry. He was quoted as saying.
requiring crypto operators to follow know your customer (KYC), anti-money laundering regulations, and due diligence followed by banks and other financial businesses that fall under the PMLA’s reporting entity classification.
Sumit Gupta, co-founder and CEO of Coindcx, an Indian crypto exchange, commented, “
Slowly but surely, we are moving towards a regulated crypto ecosystem.”
Ashish Singhal, co-founder of crypto investment app Coinswitch, opined.
The Finance Ministry’s notification to bring VDA (virtual digital asset) transactions under the PMLA is a positive step in recognizing this area. This will strengthen our collective efforts to prevent VDAs from being abused by the bad guys.
The Indian government recently led discussions on cryptocurrency regulation among G20 finance ministers and central bank governors; after the G20 finance chiefs meeting, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to jointly prepare a joint paper to help countries develop comprehensive crypto policies. The G20 requested that they jointly prepare a joint paper to help countries develop a comprehensive crypto policy. Indian Finance Minister Nirmala Sitharaman reiterated her call for international cooperation on crypto regulation.
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