MOF brings Crypto under Money Laundering Law

The Ministry of Finance has notified bringing of Crypto under Money Laundering Law via issuing Notification.

Money Laundering through Crypto

CA Pratibha Goyal | Mar 9, 2023 | Views

MOF brings Crypto under Money Laundering Law

MOF brings Crypto under Money Laundering Law

The Ministry of Finance has notified bringing of Crypto under Money Laundering Law via issuing Notification.

A cryptocurrency is a digital currency that was produced via the use of encryption techniques. Because of the use of encryption technology, cryptocurrencies can act as both a currency and a virtual accounting system. A cryptocurrency wallet is required to use cryptocurrencies.

Indian cryptocurrency exchanges must report any suspicious activity to the Financial Intelligence Unit India (FIU-IND).

The move is consistent with a global trend of forcing digital-asset platforms to adhere to anti-money laundering requirements comparable to those observed by other regulated businesses such as banks or stock brokers.

Over the last few years, digital currencies and assets such as NFTs (non-fungible tokens) have gained traction around the world. With the launch of cryptocurrency exchanges, trading in these assets has skyrocketed. Nevertheless, until this year, India lacked a clear policy for either regulating or taxing such asset classes.

The Notification Stated, “In exercise of the powers conferred by sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003) (hereinafter referred to the as the Act), the Central Government hereby notifies that the following activities when carried out for or on behalf of another natural or legal person in the course of business as an activity for the purposes of said sub sub-clause, namely:-

(i) exchange between virtual digital assets and fiat currencies;

(ii) exchange between one or more forms of virtual digital assets;

(iii) transfer of virtual digital assets;

(iv) safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; and

(v) participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.”

Explanation:- For the purposes of this notification “virtual digital asset” shall have the same meaning assigned to it in clause (47A) of section 2 of the Income-tax Act, 1961 (43 of 1961).

For Official Notification Download PDF Given Below:

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