The Indian government has responded to parliamentary questions on the legalization of cryptocurrencies and the steps it has taken to prevent cryptocurrency-related fraud. “Crypto assets are currently not regulated in India. Crypto-related fraud is addressed under existing anti-fraud and cybercrime laws,” the Minister of State at the Ministry of Finance told parliament.
Indian Ministry of Finance on Cryptocurrency Legalization
The Indian government responded to two sets of cryptocurrency-related questions in the Lok Sabha, the lower house of the Indian parliament, on Monday.
The first set asks the Finance Minister “if the government plans to legalize cryptocurrency in the country” and what “impact cryptocurrency will have on ordinary people and especially youth.”
Shri Pankaj Chaudhary, Minister of State in the Ministry of Finance, reiterated his earlier response to the parliament. “Crypto assets are currently not regulated in India. Crypto assets by definition have no borders and require international collaboration to avoid regulatory arbitrage,” he said, explaining:
Any legislation to regulate or prohibit can be effective only with significant international collaboration in assessing the risks and benefits and the evolution of common taxonomies and standards.
The minister also stated that India’s central bank, the Reserve Bank of India (RBI), “has been warning virtual currency (VC) users, holders and traders in English) that doing business with VC is associated with potential economic, financial, operational, legal, and customer issues. safety and security related risks.
While the Indian government is still working on a cryptocurrency bill, cryptocurrency income is already taxed at 30% in India and a 1% deducted tax (TDS) is applied to cryptocurrency transactions. Last month, the government introduced crypto transactions under the Prevention of Money Laundering Act 2002 (PMLA).
Prevention of crypto fraud
The finance minister was asked in Lok Sabha whether cryptocurrency-related fraud has increased in recent years, what measures the government has taken to prevent such fraud, and whether all cryptocurrency exchanges operating in the country are compliant with regulations. international finance.
“Crypto assets are currently not regulated in India. Crypto-related fraud is addressed under existing fraud and cybercrime laws,” Minister Chaudhary responded, noting that states and Union Territories (UTs) are responsible for investigating and prosecuting such crimes. He further explained that the Indian Ministry of Home Affairs has launched a portal to report cryptocurrency-related fraud to the Information and Cyber Security Division.
“The Directorate of Enforcement (ED) is investigating several cases under the provisions of the Prevention of Money Laundering Act of 2002 (PMLA) and the Foreign Exchange Management Act of 1999 (FEMA), related to crypto assets,” He further said, adding:
To date, the proceeds of crime amount to Rs. 953.70 crore (USD 116.40 million) has been seized/seized/frozen, 5 people have been arrested and 6 Prosecution Complaints (PCs) including 1 supplementary PC have been filed with the Special Court, PMLA in these cases.
“Furthermore, as per the Foreign Exchange Management Act 1999 (FEMA), the assets amount to Rs. Rs 289.28 crore has been seized under FEMA section 37A and 1 Good Cause Notice to crypto asset exchange Zanmai Labs Private Limited known as Wazirx and its directors under FEMA for transactions involving crypto assets worth Rs. Rs 2,790.74 crore has also been issued,” the minister noted.
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