India brings crypto transactions under prevention of money laundering act
The Indian Government recently convened G20 finance ministers and central bank governors to discuss cryptocurrency regulation.
The Prevention of Money Laundering Act, 2002 (PMLA) will apply to certain crypto activities “when carried out for or on behalf of another natural or legal person in the course of business,” according to a gazette published on Tuesday by India’s Ministry of Finance.
According to the notice, the exchange of virtual digital assets for fiat currencies, the exchange of one or more types of virtual digital assets, and the transfer of virtual digital assets will all fall under the purview of money laundering legislation.
Furthermore, the PMLA will apply to the safekeeping or administration of virtual digital assets, as well as participation in financial services related to the offer and sale of virtual digital assets.
According to local media, this notification is a huge step towards compliance for the cryptocurrency industry, according to Sharat Chandra, co-founder of the India Blockchain Forum.
He was quoted as saying, “It requires entities dealing in cryptocurrency to follow KYC [know your customer], anti-money laundering regulations, and due diligence in the same way that banking and other financial entities that fall under the PMLA reporting entity classification do.”
Sumit Gupta, co-founder and CEO of Indian crypto exchange Coindcx, stated, “Slowly but steadily, we are moving towards a regulated crypto ecosystem.”
“The Finance Ministry’s notification to bring VDA [virtual digital asset] transactions under PMLA is a positive step in recognizing the sector,” said Ashish Singhal, co-founder of crypto investing app Coinswitch.
“This will strengthen our collective efforts to prevent bad actors from abusing VDAs,” she added.
The Indian Government recently convened G20 finance ministers and central bank governors to discuss cryptocurrency regulation. At the conclusion of the G20 finance ministers’ meeting, India requested that the International Monetary Fund (IMF) and the Financial Stability Board (FSB) collaborate on a joint paper to assist countries in developing comprehensive crypto policies. Nirmala Sitharaman, India’s Finance Minister, has repeatedly called for international cooperation on cryptocurrency regulation.