Virtual Assets To Be Subject To Money Laundering Regulations


Exchange and transfer of virtual digital assets would also fall under PMLA laws. (Representational)

New Delh:

The finance ministry today announced that transactions involving virtual digital assets (VDA) would come under the ambit of money laundering provisions. With the new notification, participation in VDA transactions would be subject to Prevention of Money Laundering Act (PMLA). The move is aimed at tightening oversight of digital assets.

In the gazette, the ministry warned investors against “participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.”

Exchange and transfer of virtual digital assets would be covered by PMLA laws, the notification said.

CoinSwitch co-founder Ashish Singhal tweeted that the notification issued by the @FinMinIndia to bring VDA transactions under #PMLA is a positive step.

As per the Income tax act, ‘virtual digital asset’ refers to any information, code, number, or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise and can be called by whatever name.

The Enforcement Directorate, which has the mandate to investigate money laundering and forex violation cases, has already been probing crypto companies including exchanges CoinSwitch Kuber and WazirX.

The latest move by India is in line with a global trend of requiring digital-asset platforms “to follow anti-money laundering standards similar to those followed by other regulated entities like banks or stock brokers,” said Jaideep Reddy, counsel at law firm Trilegal.

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