Cryptocurrencies will now be included in the Prevention of Money Laundering Act.
The Central government has recently made an announcement that cryptocurrencies will now be included in the Prevention of Money Laundering Act (PMLA). This means that the exchange of virtual digital assets with fiat currencies, the exchange between one or more forms of virtual digital assets, and the transfer of digital assets will now be covered under money laundering laws.
Hence, any financial wrongdoing involving cryptocurrency assets can now be investigated by the Enforcement Directorate (ED). The Prevention of Money Laundering Act, 2022 (PMLA) was introduced to prevent people from legalizing money earned from illegal sources. The law allows the government to confiscate property earned through illegal proceeds, and the ED is responsible for investigating these offences. Additionally, the Financial Intelligence Unit – India (FIU-IND) is the central national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions. It is an independent body that reports directly to the Economic Intelligence Council (EIC) headed by the Finance Minister. If found guilty of money laundering, the perpetrator can be awarded rigorous imprisonment for a minimum of three years up to seven years, and an unlimited fine can also be imposed. Furthermore, their property can be seized and attached.
CA Sanjay Arora – Shalini Arora & Co. (CA in Noida)
