The Indian Ministry of Finance has announced that cryptocurrency transactions will be covered under the Prevention of Money Laundering Act 2002 (PMLA). Noting that the move “is a positive step in recognition of the sector,” the cryptocurrency insider explained that it will bolster the industry’s efforts to prevent the misuse of virtual digital assets by bad actors.
India applies PMLA to crypto transactions
India’s Finance Ministry published an official journal on Tuesday stating that certain cryptocurrency 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 notice, exchanges between virtual digital assets and fiat currencies, exchanges between one or more forms of virtual digital assets, and transfers of virtual digital assets will be covered by the Money Laundering Act. Furthermore, custody or management of virtual digital assets and participation in financial services related to the offering and sale of virtual digital assets will also fall under the jurisdiction of the Palestinian Asset Management Authority.
Sharath Chandra, co-founder of the India Blockchain Forum, told local media that this notification is a great step towards compliance for the crypto industry. He was quoted as saying:
Entities dealing in cryptocurrencies are required to follow KYC [know your customer]anti-money laundering regulations, and due diligence as conducted by banking and other financial entities that fall under the classification of reporting entities under the PMLA.
“Slowly but surely, we are moving towards a regulated cryptocurrency ecosystem,” commented Sumit Gupta, Co-Founder and CEO of Indian cryptocurrency exchange Coindcx.
Ashish Singhal, co-founder of crypto investing app Coinswitch, had the following opinion:
Notify the Ministry of Finance to bring the VDA [virtual digital asset] Transactions under the PMLA are a positive step in the recognition of the sector. This will enhance our collective efforts to prevent abuse of VDAs by bad actors.
The Government of India recently led discussions on cryptocurrency regulation among G20 finance ministers and central bank governors. At the conclusion of the G20 Chiefs of Finance meeting, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to cooperate in joint paper To help countries craft comprehensive encryption policies. Indian Finance Minister Nirmala Sitharaman has repeatedly called for international cooperation on cryptocurrency regulation.
What do you think about the Government of India’s implementation of the Anti-Money Laundering Act on cryptocurrency transactions? Let us know in the comments section below.
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