March 27, 2023

Cryptocurrency transactions in India are now under the Money Laundering Act, the government has announced

Crypto under Money Laundering Act in India: Cryptocurrencies may have been in the limelight recently thanks to AI chatbots, especially ChatGPT, but that doesn’t mean crypto’s popularity hasn’t waned. Talking about India in particular, there is constant pressure on the government to clarify the status of cryptocurrencies in the country in terms of rules and regulations.

It also becomes important as Shashikant Das, the current Governor of the Reserve Bank of India (RBI), has called crypto a threat to the economy in public forums. But now Indian government has taken a big step regarding crypto transactions in the country.

In fact, the Ministry of Finance, Government of India has announced that henceforth cryptocurrency related transactions i.e. crypto trade within the country will come under the existing ‘money laundering’ laws. Yes! Experts say the government has finally made up its mind to crack down on cryptocurrencies.

The notification issued by the government clearly states that transactions related to virtual and digital assets will now be subject to the provisions of the Prevention of Money Laundering Act (PMLA) 2002.

We inform you that this notice is applicable for any kind of cryptocurrency transaction, crypto possession or crypto related financial services within India.

According to the law, ‘virtual digital asset’ means any asset in the form of information, code, number or token, generated by cryptographic means, by whatever name called.

It is also worth noting that cases of money laundering and foreign exchange violations in the country are investigated by the Enforcement Directorate (ED) and this agency is already investigating some crypto exchanges in the country.

Crypto under Money Laundering Act: What will be the impact?

In fact since the publication of this notification, Indian crypto exchanges are now required to report all suspicious activities to the Financial Intelligence Unit of India (FIU-IND).

Other regulated entities such as banks or stockbrokers have to comply with anti-money laundering standards under the current regime. But from now on it will also apply to digital-asset platforms.


Also, with crypto being brought under the Money Laundering Act, investigative agencies will now have more powers to monitor transactions of digital assets etc. beyond the borders of the country.

The move comes at a time when the country’s Finance Minister Nirmala Sitharaman recently emphasized a global framework for cryptocurrencies.

India has asked the IMF and the Financial Stability Board (FSB) to jointly prepare a technical paper on crypto assets under the G-20 presidency.

Regarding cryptocurrencies in the country, no laws and regulations have been finalized yet. As we have already mentioned, the Reserve Bank of India has advocated banning cryptocurrencies several times.

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