The Center has said that money laundering provisions will now also be imposed on cryptocurrencies or virtual assets, PTI reported on Wednesday.
In a notification issued Tuesday, the Finance Ministry said that transactions involving the exchange, transfer, and custody of crypto assets will be covered by the Prevention of Money Laundering Act, or PMLA.
All cryptocurrency exchanges in India will now be required to report suspicious activity to the Financial Intelligence Unit, a unit of the Department of Revenue that collects financial intelligence on PMLA-related crimes.
The decision is also likely to help investigative agencies take action against companies involved in cryptocurrency trade, according the indian express.
In August last year, the Enforcement Directorate froze Rs 64.67 crore worth of bank assets from a cryptocurrency exchange company. WazirX. The agency had alleged that WazirX helped companies provide instant loans to launder fraudulently acquired money by allowing them to purchase and transfer crypto assets.
In February, Finance Minister Nirmala Sitharaman told Parliament that India has been discussing a standard operating protocol to regulate crypto assets with G-20 member countries, according to PTI.
He said that web3 and crypto assets are relatively new and evolving sectors and require significant international collaboration for any legislation to be fully effective.
Web3 refers to an online ecosystem that eliminates the need for major corporations and search engines like Google. It uses the blockchain, a computer database of transaction records that is stored in several different places at the same time.
Prior to this, in March of last year, the indian government He had said that he has no plans to introduce cryptocurrency. The Reserve Bank of India had also raised "serious concerns" around private cryptocurrencies, saying they could cause financial instability.
