Cryptocurrency-related crimes in India have amounted to Rs 953.70 crore so far, as per Union Finance Minister Nirmala Sitharaman. Responding to a question by DMK MP Velusamy P on how the government is detecting and monitoring criminal activities using virtual assets, Sitharaman said that the Financial Action Task Force (FATF) has made several amendments to mitigate the growing use of virtual assets for money laundering and terrorist financing.
The Reserve Bank of India (RBI) has issued public notices cautioning people regarding cryptocurrencies, said Sitharaman. “RBI has been cautioning users, holders and traders of Virtual Currencies (VCs) vide public notices from 2013, that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks,” the minister said, as reported by Hindustan Times.
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The FATF has adopted several methods to prevent growing illegitimate activities from cryptocurrencies.
The RBI has also advised its regulated entities 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), and Combating Financing of Terrorism (CFT) obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.
The crimes include the arrest of five individuals and six prosecution complaints filed to date before the special court under the Prevention of Money Laundering Act, 2002 (PMLA). The Enforcement Directorate is investigating several cases under the provisions of PMLA and Foreign Exchange Management Act, 1999 (FEMA) related to cryptocurrencies.
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Meanwhile, Minister of State for Finance Pankaj Chaudhary on Monday informed the Parliament that India is working with G20 nations to establish a globally coordinated policy on crypto assets. With its G20 Presidency, the country is taking advantage of the opportunity to prioritise different issues, including crypto assets, for international collaboration.
The nature of crypto assets means that they are not bound by borders and necessitate cooperation between nations to avoid regulatory arbitrage, Chaudhary noted. Therefore, the minister emphasised that any regulatory legislation, whether for regulation or banning, can only be successful through substantial international collaboration in assessing the risks and benefits and developing shared taxonomy and standards.
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