The Indian Ministry of Finance has announced that crypto transactions will be covered by the Prevention of Money Laundering Act 2002 (PMLA). Noting that the move “is a positive step in industry recognition,” a crypto expert explained that it will strengthen industry efforts to prevent virtual digital assets “from being misused by bad actors.”
India applies PMLA to crypto transactions
India’s Ministry of Finance published a gazette on Tuesday notifying that certain cryptographic activities “when carried out for or on behalf of another natural or legal person in the course of business” will be subject to the Money Laundering Prevention Act. 2002 money (PMLA).
According to the notice, 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 by money laundering law. Likewise, the custody or administration of virtual digital assets and participation in financial services related to the offer and sale of virtual digital assets will also be the responsibility of the PMLA.
Sharat Chandra, co-founder of India Blockchain Forum, told local media that this notification is a big step towards compliance for the crypto industry. He was quoted as saying:
Requires entities dealing in crypto to follow KYC (know your customer), anti-money laundering regulations and due diligence, just as followed by banks and other financial entities that are classified as 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 investment app Coinswitch, opined:
The notification from the Ministry of Finance to bring VDA (virtual digital assets) transactions under PMLA is a positive step in recognizing the sector. This will strengthen our collective efforts to prevent malicious actors from misusing VDAs.
The Indian government recently led discussions on cryptocurrency regulation between the G20 finance ministers and central bank governors. Concluding the G20 finance chiefs meeting, 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. Indian Finance Minister Nirmala Sitharaman has repeatedly called for international cooperation on crypto regulation.
What do you think about the Indian government applying the Prevention of Money Laundering Act to cryptocurrency transactions? Let us know in the comments section.
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