The Indian government has taken another step towards strengthening its oversight of the cryptocurrency industry by implementing money laundering provisions. As per a notice issued by the Finance Ministry on Tuesday, the new anti-money laundering legislation will be applicable to cryptocurrency trading, safekeeping, and other financial services, Bloomberg reported.
This move is in line with the global trend of digital asset platforms being required to follow anti-money laundering standards that are similar to those followed by regulated entities like banks and stockbrokers. Jaideep Reddy, a counsel at the Trilegal law firm, has acknowledged this alignment and stated that it is a part of the government's larger agenda of regulating the cryptocurrency sector in India.
In 2020, India had already imposed more stringent tax rules on the crypto sector, which included the application of a trading levy. These moves, coupled with the global decline in digital assets, had led to a significant drop in domestic trading volumes.
However, this latest anti-money laundering measure has raised concerns among industry experts, who have expressed apprehension that implementing the necessary compliance measures could require a significant amount of time and resources. Reddy has noted that this is a significant challenge that the cryptocurrency industry in India will have to tackle in the coming months.
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