The Indian finance ministry recently made a significant announcement concerning cryptocurrency. The authority claims that the PMLA (Prevention of Money Laundering Act) will apply to digital assets and cryptocurrency transactions in India.
The latest move has been undertaken to tighten oversights surrounding crypto assets. The ministry has also warned investors against participating in and provisioning financial services regarding issuers’ offers and virtual asset sales.
The news was shared via an official notification released by the Indian finance ministry. Given the sheer magnitude of the situation, the string of announcements intrigued all the major crypto exchanges in India. The exchanges learned that the transfer and exchange of digital assets will be treated under money laundering provisions.
The co-founder of CoinSwitch, Ashish Singhal, says that the notification is a big step in the right direction toward accepting the sector. Ashish added that the development would strengthen efforts to stop VDAs from being mistreated by malicious actors.
The Income Tax Act states that “virtual digital assets” refer to any code, token, number, or information (not referring to Indian or foreign currency) generated via cryptographic means or otherwise and can be called by any name.
The Enforcement Directorate has already contacted several crypto exchanges, including WazirX and CoinSwitch Kuber. The authority has been mandated to investigate forex violations and money laundering cases.
The Indian Finance Ministry’s actions are in line with the new standards that international regulators are establishing for digital assets. Jaideep Reddy, a lawyer at Trilegal, agrees that adopting AML standards is similar to what banks and stock brokers worldwide are doing.
Establishing such guidelines can facilitate the longevity of crypto in the region.