Crypto transactions now under India’s money laundering law

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The Indian government has declared that the country’s anti-corruption regulations will apply to token and cryptocurrency transactions. According to a notice issued by India’s finance ministry, the Prevention of Money Laundering Act (PMLA) will apply to transactions involving “virtual digital assets” .

Any information, code, number, or token (not including Indian cash or foreign currency) created through cryptography or any other method and given any name is considered a “virtual digital asset” under the Income Tax Act.

The regulatory body further cautioned individuals not to “participate in and provide financial services related to an issuer’s offer and sale of a virtual digital asset.”

That’s the most recent move towards governing digital assets more strictly. The movement of these assets out of India can now be monitored more closely by the government.

What does this new regulation mean?

Cryptocurrency and virtual asset exchanges, custodians, wallet providers, and other businesses operating in India are now considered “reporting companies” under the PMLA. Crypto companies need complete information on their investors and anyone else involved in the exchange of digital assets.

They need to keep up with KYC/AML standards for reporting to financial institutions, payment processors, and other intermediaries. In addition, it is now legal for crypto exchanges to report any suspicious activity to the appropriate Indian authorities.

Good news for the development of crypto in India, as this provides much-needed direction on how the industry should be regulated.This demonstrates that the Indian government is making efforts to adopt eco-friendly regulations.

There have been numerous warnings from India’s central bank, but the country still has not finalised its cryptocurrency laws.

The administration of Prime Minister Narendra Modi has been at the forefront of efforts to secure a more comprehensive international agreement on digital assets as part of India’s leadership role in the G20 forum.

Efforts to reach a global consensus on how to deal with the dangers posed by cryptocurrencies have been spearheaded by India.

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