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.