subject to the PMLA. The ministry stated that the move is aimed at preventing the misuse of virtual digital assets by bad actors for money laundering and terrorist financing activities.
The decision has been welcomed by the crypto industry in India, with insiders stating that it is a positive step towards recognizing the sector and strengthening efforts to prevent misuse. The move is also expected to boost investor confidence in the industry, which has been facing regulatory uncertainty in recent years.
India has been grappling with the issue of regulating cryptocurrencies for some time now. In 2018, the Reserve Bank of India (RBI) had banned banks from dealing with crypto-related businesses, which was later overturned by the Supreme Court in March 2020. Since then, the government has been working on a new regulatory framework for the sector.
The move to apply the PMLA to crypto transactions is seen as a step towards bringing the sector under a regulatory framework. However, experts have cautioned that more clarity is needed on the definition of virtual digital assets and the scope of the PMLA in relation to crypto transactions.
Despite the regulatory challenges, the crypto industry in India has been growing steadily. According to a report by Chainalysis, India saw a 640% increase in crypto investments between April 2020 and May 2021, with the total value of investments reaching $6.6 billion.
The move to apply the PMLA to crypto transactions is expected to further boost the growth of the industry in India, while also ensuring that it operates within a regulatory framework that prevents misuse by bad actors.
