Entities Complying with Anti-Money Laundering Regulations
Recently, 28 entities in India that provide services related to virtual digital assets (VDAs) have registered with the Financial Intelligence Unit-India (FIU-IND).
According to Pankaj Chaudhary, the Indian Minister of State for Finance, well-known players like CoinDCX, WazirX, Coinswitch, and ZebPay have officially registered with FIU-IND.
This registration is in response to the government’s notification earlier this year, which categorizes VDA companies and crypto exchanges as ‘reporting entities’ under the Prevention of Money Laundering Act (PMLA).
Regulatory Framework and KYC Requirements
In March, the government mandated that crypto exchanges and their intermediaries must perform Know Your Customer (KYC) processes for their clients and platform users. As reporting entities under the PMLA, these crypto exchanges and VDA companies are required to maintain detailed KYC records to combat money laundering and illicit activities in the crypto space.
International Compliance for Offshore Exchanges
Offshore crypto exchanges operating in India are also subject to the regulatory framework. Minister Pankaj Chaudhary confirmed that the guidelines and reporting requirements apply to these exchanges, and failure to comply may lead to appropriate action under the PMLA.
Taxation Woes and Market Impact
India supports the idea of coordinated global crypto regulations, aligning with international bodies such as the IMF and FSB. However, the Indian government’s taxation measures, including a 1% tax on crypto transactions and a 30% tax on profits, have faced criticism and negatively impacted the Indian crypto market.
Hot Take: Crypto Entities in India Register with FIU-IND to Comply with AML Regulations
28 crypto entities in India, including well-known players like CoinDCX, WazirX, Coinswitch, and ZebPay, have officially registered with the Financial Intelligence Unit-India (FIU-IND) to comply with anti-money laundering regulations. These entities, classified as ‘reporting entities’ under the PMLA, are required to perform KYC processes and maintain detailed records to combat money laundering and illicit activities. The regulatory framework also extends to offshore exchanges operating in India, emphasizing the government’s commitment to enforcing regulatory standards. However, the recent taxation measures imposed on crypto transactions have faced criticism and adversely affected the Indian crypto market, highlighting the challenges in this domain.
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