India enforces anti-money laundering laws on crypto trades

Crypto winter
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Anti-Money Laundering (AML) requirements for cryptocurrencies are nothing new, but it has only recently been decided by the Indian government to inform all interested parties of their duty to adhere to local AML laws.


The Prevention of Money-Laundering Act (PLMA) 2002 will now apply to a number of cryptocurrency transactions, including exchanges, transfers, safekeeping, and management of digital assets, according to a notification from the Ministry of Finance released on March 7 in The Gazette of India. The PMLA also applies to financial services pertaining to an issuer’s offer and selling of virtual assets.

The notification doesn’t contain much information, but the PMLA requires financial institutions to keep a record of all transactions for the previous ten years, hand over this record to authorities upon request, and confirm the name of every client.

Strict Laws

The notification will make it more difficult for cryptocurrency companies to operate in India as authorities around the world tighten AML standards for cryptocurrencies. Additionally, it hasn’t exactly been cosy in recent years. Holdings and transfers of digital assets will be subject to a 30% tax March 2022 under amended tax regulations.

Within 10 days of the new tax policy, trading activity on significant cryptocurrency exchanges in India decreased by 70%;. Over the following three months, it decreased by nearly 90%. The strict tax laws pushed cryptocurrency traders to offshore exchanges and compelled emerging cryptocurrency projects to leave India.

By forbidding cryptocurrency sponsorships and advertising in the neighbourhood women’s cricket league in February 2023. Indian authorities once more showed their stern attitude on cryptocurrencies. This came after a prior suspension for Premier League of Men’s Cricket, which was put in place back in 2022.

Nirmala Sitharaman, India’s finance minister, called for global attempts to regulate cryptocurrency in 2023. As her country celebrated its first G20 presidency. She urged a concerted effort “for building and understanding the macro-financial implications,”. Which could be used to change cryptocurrency regulation worldwide.


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