India subjects crypto transactions to anti-money laundering law

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Imposing anti-money laundering (AML) standards on cryptocurrencies is nothing new, but it was only recently that the Indian government decided to notify all stakeholders of their obligation to comply with domestic AML laws. Thing.

March 7, The Gazette of India It was published Notice from the Department of the Treasury making various virtual currency transactions subject to the Prevention of Money Laundering Act (PLMA) 2002, including the exchange, transfer, storage and management of virtual assets. His PMLA also includes financial services related to the offer and sale of virtual assets issuers.

The notice does not provide many details, but the PML Act oblige Financial institutions must keep records of all transactions for the last ten years, provide these records to officials upon request, and verify the identity of all customers.

Despite being aptly written at a time when regulators around the world are tightening AML standards for cryptocurrencies, the notice will complicate the lives of cryptocurrency companies in India. And the last few years are already not comfortable. From March 2022, the holding and transfer of digital assets will be taxed at 30% in accordance with revised tax regulations.

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Trading volumes on major cryptocurrency exchanges across India fell by 70% within 10 days of the new tax policy and nearly 90% in the next three months. Strict tax regimes have forced crypto traders to move to offshore exchanges and upstart crypto projects to move out of India.

In February 2023, Indian authorities again took a tough stance on cryptocurrencies, preemptively banning cryptocurrency advertising and sponsorships in the local women’s cricket league. This follows a previous ban on men’s cricket Premier League introduced in 2022.

In 2023, when celebrating India’s first president at the G20, the country’s finance minister, Nirmala Sitharaman, urged international efforts to regulate cryptocurrencies. She called for a concerted effort to “build and understand macro-financial implications,” which she said could be used to reform global cryptocurrency regulation.