Regulators tighten anti-money laundering measures for cryptocurrencies

Indian government imposes anti-money laundering provisions on cryptocurrencies

The Indian government has imposed anti-money laundering (AML) provisions on cryptocurrencies and virtual assets. According to a gazette notification by the finance ministry, crypto trading, safekeeping, and related financial services will be subject to AML legislation. Indian crypto exchanges are required to report suspicious activity to the Financial Intelligence Unit India (FIU-IND), similar to the standards followed by banks and stock brokers.

The move aligns with the global trend of digital-asset platforms being required to follow AML standards to curb money laundering activities. The Prevention of Money-laundering Act, 2002 now covers 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, 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.

Sharat Chandra, co-founder of India Blockchain Forum, stated that entities dealing in crypto must follow KYC, AML regulations and due diligence similar to banking and other financial entities that fall under the classification of reporting entities under PMLA. This move comes as the Indian government works to regulate the cryptocurrency industry amid growing concerns of money laundering and other illicit activities.