Win for Transparency, Say Industry Giants as Cryto Trade Comes Under Money Laundering Act Ambit

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In step one in direction of regulating cryptocurrency, the federal government mentioned on March 7 that cash laundering legal guidelines will apply to crypto buying and selling, weeks after Finance Minister Nirmala Sitharaman mentioned the regulation could be a subject of dialogue at G20.

In a notification, the Ministry of Finance mentioned “exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, [and] transfer of virtual digital assets” will probably be coated beneath cash laundering legal guidelines.

Additionally, the notification identified that “safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets and participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset” can even be coated beneath the legislation.

In easy phrases, the transfer to convey the sector beneath the Prevention of Money Laundering Act (PMLA) means corporations now must carry out and report particulars equivalent to — Know Your Transactions (KYT), Transactions Monitoring and Reporting, Address Screening and Reporting, Suspicious Activities Reports and Suspicious Transactions Reports.

Inside View

Prashant Garg, EY India, Technology Partner, advised News18 that the accountability of sustaining transparency, identification, and following AML rules is on crypto exchanges.

“Globally, banks are severing ties with exchanges, putting a strain on exchanges and forcing them to look for an alternative model. Crypto transactions continue to lack transparency and trial. This move brings responsibility on the crypto markets to bring transparency to trading,” he mentioned.


Ashish Singhal, co-founder of CoinSwitch, known as it a optimistic step and wrote on Twitter: “This will strengthen our collective efforts to prevent VDAs from being misused by bad actors.”

However, CoinSwitch’s spokesperson acknowledged that the brand new guidelines are in place to forestall cryptocurrency misuse, equivalent to cash laundering, however they don’t forestall customers from changing crypto to INR on the CoinSwitch app or CoinSwitch PRO platforms on an everyday, KYC-verified foundation.

“We took a conscious decision in 2021 to limit crypto movement within our KYC-compliant ecosystem to ensure transparency and compliance with the laws of the land,” he added.

Rajagopal Menon, Vice President at WazirX, advised News18: “We welcome the new notification regarding anti-money laundering (AML) reporting to FIU for crypto assets, which aligns with our existing policies and practices”.

According to him, that is the primary of many steps in direction of regulation and WazirX is dedicated to complying with all related rules and pointers.

“We have always taken a proactive approach to AML and know your customer (KYC) compliance and we will continue to work closely with regulators and law enforcement agencies. We remain dedicated to providing a safe, transparent, and seamless platform for our users to trade and invest in crypto assets,” he famous.


Punit Agarwal, Founder of KoinX, known as the transfer a big step ahead in offering regulatory readability for the crypto business in India. He believes that by bringing crypto companies beneath the ambit of the PMLA, the federal government is taking measures to make sure that the business can function in a regulated setting.

He mentioned: “This won’t solely promote transparency but additionally help in figuring out and curbing the actions of dangerous actors throughout the business. The collective efforts of the business to forestall the misuse of crypto by way of cash laundering and different unlawful actions can even be strengthened consequently.”

Additionally, he believes that it will enhance the legitimacy of the crypto industry in the eyes of the public and is also a positive step towards establishing a robust regulatory framework that fosters growth while ensuring accountability and security.


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