Crypto assets brought under anti-money laundering law

Crypto assets brought under anti-money laundering law

The government will add virtual assets to the Prevention of Money Laundering Act in a major step towards regulating the cryptocurrency market in India.

A notice issued by the Ministry of Finance on 9 March 2023 was sent to all financial institutions and intermediaries registered under the act. It states that virtual assets will now be considered as “property” under the act and all transactions related to them will be subject to the same regulations as other financial transactions.

The notice requires financial institutions and intermediaries to maintain records of all transactions of virtual assets and to report any suspicious transactions to the Financial Intelligence Unit. The unit is responsible for analysing financial transactions and providing intelligence to law enforcement agencies to combat financial crime.

This move follows reports and industry analysis that the government has been struggling to regulate the cryptocurrency market, which has seen a surge in popularity in recent years. The lack of regulation raises concerns about cryptocurrencies being used for illegal activities such as money laundering and financing terrorism.

Including virtual assets under the PMLA will bring more clarity to the regulatory landscape surrounding cryptocurrencies in India. It will also provide a legal framework for the government to take action against individuals or entities involved in illegal activities using virtual assets.