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Money Laundering Provisions On Cryptocurrencies

Money Laundering Provisions On Cryptocurrencies:

The government has recently imposed money laundering provisions on cryptocurrencies.

  • The Finance Ministry said the anti-money laundering legislation has been applied to crypto trading, safekeeping and related financial services.
  • The notification said,
    • Exchange between virtual digital assets and fiat currencies,
    • Exchange between one or more forms of virtual digital assets,
    • Transfer of virtual digital assets, safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets, and participation in and
    • Provision of financial services related to an issuer’s offer and sale of a virtual digital asset”
  • All of the above will now be covered by the Prevention of Money-laundering Act, 2002.
  • Virtual digital assets were defined as any code or number or token generated through cryptographic means with the promise or representation of having inherent value.
  • After this, Indian crypto exchanges will have to report suspicious activity to the Financial Intelligence Unit India (FIU-IND).
  • The move 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 like banks or stock brokers.
  • Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years.
  • Trading in these assets has increased manifold with cryptocurrency exchanges being launched.


  • It is a digital currency that can be used in place of conventional money.
  • In cryptocurrencies, cryptography is used to secure and verify transactions.
  • It is also used to control the supply of cryptocurrencies.