India's money laundering act now applies to variety of crypto operations
Prevention of Money-Laundering Act (PLMA) of 2002 now applies to a variety of cryptocurrency operations, including the exchange, transfers, custody, and administration of virtual assets. The PMLA also applies to the provision of financial services in connection with the offer and sale of virtual assets by an issuer.
The announcement that cryptocurrency trade will be subject to India's anti-money laundering regulations was made by the federal government of India through a notification from the Ministry of Finance. It was also got published in the Gazette of India. All parties interested in complying with the national anti-money laundering law have been notified by the Indian government.
Money laundering laws will apply to the exchange of virtual digital assets and fiat currencies, as well as the exchange of virtual digital assets between one or more forms. The notification further stated that involvement in financial services relating to the offer and sale of virtual digital assets as well as the administration or custody of those assets will be included.
Financial institutions are obliged by the PMLA to maintain records of all transactions for the last ten years and need to provide these records if requested, so as to verify the identity of all clients.
While the country's central bank has repeatedly warned against the use of cryptocurrencies, no legislation or regulations have been finalized. Indian authorities will be able to monitor the transfer of cryptocurrencies beyond the borders of the country by extending India's anti-money laundering laws to cryptocurrencies.
After India's first G20 presidency, Nirmala Sitharaman, India's Finance Minister, called for international efforts to regulate cryptocurrencies in 2023. With its leadership of the G-20 forum, the Narendra Modi administration has been pushing for a broader global agreement to address the risks associated with cryptocurrencies.
CBW - External Analyst