Crypto exchanges and brokers dealing in virtual digital assets (VDA) will now be required to perform KYC of its clients and users of the platform. Additionally, exchanges will have to report suspicious activity to the Indian Financial Intelligence Unit.
The notice says that entities that do business with VDA will be considered "reporting entity" under PMLA-banks, financial institutions, entities engaged in the real estate and jewelry sectors, as well as casinos, are now 'reporting entities'. Under this law, every reporting entity must keep a record of all transactions.
Crypto entities have to keep records
The Center's decision to bring the cryptocurrency The sector under the purview of PMLA is in line with the global trend of requiring digital asset platforms to follow anti-money laundering standards similar to those followed by other regulated entities such as banks or stockbrokers.
A notification issued in the bulletin said that "exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, transfer of virtual digital assets (VDAs), custody or management of virtual digital assets or instruments that allow control over virtual digital assets". assets, and the participation in and provision of financial services related to the offer and sale of a virtual digital asset by an issuer" will now be covered by the Money Laundering Prevention Law2002.
The notification says that entities that do business with VDA will now be considered 'reporting entities' under the PMLA. Under this law, each reporting entity is required to keep a record of all transactions, including the record of all cash transactions over Rs 10 lakh, for at least five years. They are also required to keep a record of all series of cash transactions integrally connected to each other, individually valued below Rs 10 lakh, when such series of transactions has taken place within one month and the monthly aggregate exceeds Rs 10 lakhs.
