Crypto trading to come under Money laundering Act : Finance Ministry


New Delhi :  In a move  to tighten oversight of virtual digital assets, the Government of India has imposed money laundering provisions on the cryptocurrency sector.

The finance Ministry in a Gazette notification on 7th March has brought crypto trading, safekeeping and related financial services under PML act 2002.

“In exercise of the powers conferred by sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby notifies that the following activities when carried out for or on behalf of another natural or legal person in the course of business as an activity for the purposes of said sub sub-clause, namely:- (i) exchange between virtual digital assets and fiat currencies; (ii) exchange between one or more forms of virtual digital assets; (iii) transfer of virtual digital assets; (iv) safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; and (v) participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset” the notification said.

The move by India aligns with a 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,” said Jaideep Reddy, counsel at law firm Trilegal. Last year India applied more stringent tax rules on the crypto sector, including applying a levy on trading. Those moves, as well as a global rout in digital assets, caused a plunge in domestic trading volumes.


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