Summary
- India’s Ministry of Finance has notified that certain crypto activities will be subject to the Prevention of Money Laundering Act, 2002 (PMLA).
- The move is a positive step in recognizing the sector and will strengthen efforts to prevent virtual digital assets from being misused by bad actors.
- India recently asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to collaborate on a joint paper to help countries formulate comprehensive crypto policies.
Background
India’s finance ministry has announced that crypto transactions will be covered under the Prevention of Money Laundering Act, 2002 (PMLA). The move “is a positive step in recognizing the sector,” according to a crypto insider, who also noted that it will strengthen the industry’s efforts to prevent virtual digital assets “from being misused by bad actors.”
Application of PMLA to Crypto Transactions
India’s Ministry of Finance published a gazette on Tuesday notifying that certain crypto activities “when carried out for or on behalf of another natural or legal person in the course of business” will be subject to the Prevention of Money Laundering Act, 2002 (PMLA). According to the notice, exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, transfer of virtual digital assets as well as safekeeping or administration of virtual digital assets and participation in financial services related to offer and sale of virtual digital assets will all fall under this money laundering law.
Reactions from Crypto Industry Insiders
Sharat Chandra, co-founder India Blockchain Forum, stated this notification is a great step towards compliance for the crypto industry. Sumit Gupta, co-founder and CEO Indian crypto exchange Coindcx commented “Slowly but surely we are moving towards regulated crypto ecosystem”. Ashish Singhal, co-founder cryptocurrency investing app Coinswitch opined “Finance Ministry’s notification…is a positive step in recognizing sector”. < h2 > G20 Meeting & India’s Request for Comprehensive Crypto Policies
The government India recently led discussions cryptocurrency regulation among G20 finance ministers central bank governors. At conclusion G20 meeting finance chiefs , India asked International Monetary Fund ( IMF ) Financial Stability Board ( FSB ) collaborate joint paper help countries formulate comprehensive crypto policies . India ‘ s Finance Minister Nirmala Sitharaman