Nearly a week after crypto was put under the Money Laundering Law by the finance ministry, India's FM Sitharaman has revealed that funds amounting to Rs 953.70 crore from criminal activities involving cryptocurrencies have been seized, frozen, or attached under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA), and the Foreign Exchange Management Act, 1999 (FEMA).
Finance Minister Nirmala Sitharaman said so in Parliament recently, when she was responding to a question on whether the government was aware of cryptocurrencies being used for money laundering.
"Further...under FEMA, assets amounting to Rs 289.28 crores have been seized...and show cause notice to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its directors under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore has also been issued," she said.?
The action against WazirX was taken by the Directorate of Enforcement (ED) in 2021. Sitharaman also informed Parliament that the Reserve Bank of India (RBI) has issued public notices warning people about cryptocurrencies.?
"RBI has been cautioning users, holders and traders of virtual currencies (VCS) vide public notices on 24 December, 2013, 01 February, 2017 and 05 December, 2017 that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks,"?FM Sitharaman noted in her answer, as per an ET report.
"RBI, vide its circular dated 31 May, 2021 has also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.," she added.
Last week, India's finance ministry tightened the definition of the Prevention of Money Laundering Act (PMLA) and included cryptocurrencies in the definition of the anti-money laundering law.??
India's?money laundering laws will apply to trade in cryptocurrencies, the finance ministry said in a notification dated March 7.
The exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets, and the transfer of digital assets will be covered under money laundering laws, the notification said.
The safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also be covered, the notification added.?This measure is?expected to aid investigative agencies in carrying out their actions against crypto?companies, with the Enforcement Directorate (ED) and Income Tax Department already probing several such cases against companies running cryptocurrency exchanges and transactions.
According to Reuters, extending India's money laundering rules to cryptocurrencies will give authorities more authority in monitoring the transfer of these assets outside the country's borders.?
Also Read:?Meet Hitesh Matlani, The 33YO Who Has Been Travelling Around The World Only With Bitcoin Since 2021
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