India’s finance ministry has announced that crypto transactions will be covered under the Prevention of Money Laundering Act, 2002 (PMLA). Noting that the move “is a positive step in recognizing the sector,” a crypto insider explained that it will strengthen the industry’s efforts to prevent virtual digital assets “from being misused by bad actors.”

India Applies PMLA to Crypto Transactions

India’s Ministry of Finance published a gazette on Tuesday notifying that certain crypto activities “when carried out for or on behalf of another natural or legal person in the course of business” will be subject to the Prevention of Money Laundering Act, 2002 (PMLA).

According to the notice, the exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets, and the transfer of virtual digital assets will be covered under the money laundering law. Moreover, the safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also fall under the purview of the PMLA.

Sharat Chandra, co-founder of India Blockchain Forum, told local media that this notification is a great step towards compliance for the crypto industry. He was quoted as saying:

It mandates entities dealing in crypto to follow KYC [know your customer], anti-money laundering regulations, and due diligence as followed by banking and other financial entities which fall under the classification of reporting entities under PMLA.

Sumit Gupta, co-founder and CEO of Indian crypto exchange Coindcx, commented: “Slowly but surely, we are moving towards a regulated crypto ecosystem.”

Ashish Singhal, co-founder of crypto investing app Coinswitch, opined:

Finance Ministry’s notification to bring VDA [virtual digital asset] transactions under PMLA is a positive step in recognizing the sector. This will strengthen our collective efforts to prevent VDAs from being misused by bad actors.

The government of India recently led discussions on cryptocurrency regulation among G20 finance ministers and central bank governors. At the conclusion of the G20 meeting for finance chiefs, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to collaborate on a joint paper to help countries formulate comprehensive crypto policies. India’s Finance Minister Nirmala Sitharaman has repeatedly called for international cooperation on crypto regulation.

What do you think about the government of India applying the Prevention of Money Laundering Act to cryptocurrency transactions? Let us know in the comments section below.

Source: Bitcoin.com

The post India Brings Crypto Transactions Under Prevention of Money Laundering Act appeared first on Crypto Breaking News.

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Filed under: News - @ March 11, 2023 3:30 am