The Enforcement Directorate is investigating a number of cases as per the Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA) that involve cryptocurrencies.
The Ministry of Finance in an official statement to the Lok Sabha on Monday said that up to now, the proceeds of crime amounting to Rs 953.70 crore have been seized, frozen or attached, with five people arrested and six Prosecution Complaints (PCs) including one supplementary PC filed in the Special Court, PMLA on these cases.
“Additionally under the Foreign Exchange Management Act, 1999 (FEMA), assets worth Rs 289.28 crore were confiscated under section 37 A of FEMA and a showcause notice was also issued to the cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its Directors for transactions related to cryptocurrencies worth Rs 2,790.74 crore,” said the statement.
The response said that the RBI has been alerting users, holders and traders of Virtual Currencies (VCs) through public notices on December 24, 2013; February 1, 2017 and December 5, 2017 that dealing in VCs is associated with potential risks in terms of economics, finance, operations, legality, customer protection and security.
RBI, via its circular dated 31 May, 2021 also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.
The Ministry in the statement informed that the Financial Action Task Force (FATF) Plenary discussed and accepted alterations to the FATF Standards to address the growing use of virtual assets for money laundering and terrorist financing at the request of the G20 Ministers.
This comprises of an alteration to the FATF Recommendations and glossary to make clear which businesses and activities the FATF requirements apply to in the case of virtual assets. Exchanges and wallet providers will be expected to carry out AML/CFT controls, and to be licensed or registered and supervised or monitored by national authorities.
Enhancing the standards is part of a comprehensive approach that the FATF has developed to counteract the misuse of virtual asset activities for money laundering and terrorist financing, said the statement.
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