India imposes AML legislation to crypto in a bid to increase regulatory oversight
|- India has tightened its oversight of digital assets, imposing money laundering provisions on cryptocurrencies.
- The Finance Ministry issued a notice on Tuesday, announcing the imposition of the anti-money laundering legislation on crypto trading.
- India’s move aligns with that of regulators worldwide, increasing oversight and regulation of virtual assets.
India has aligned its treatment of cryptocurrencies with that of the United States and regulators worldwide. The South Asian republic has imposed money laundering provisions on cryptocurrencies to tighten its oversight on virtual assets.
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Indian Finance Ministry announces anti-money laundering legislation to crypto
Cryptocurrencies like Bitcoin, Ethereum, altcoins and stablecoins have seen an increase in regulatory scrutiny and oversight after the Terra-LUNA implosion, the FTX exchange collapse and lately, the Silvergate bank crisis. The tumultuous events of 2022 have garnered reactions from global lawmakers and regulators, and resulted in a regulatory crackdown in most countries.
The Indian Finance Ministry issued a notice on Tuesday, announcing the imposition of the anti-money laundering legislation to crypto trading, safekeeping and related financial services. India’s move is a step in the direction to tighten the South Asian country’s oversight of digital assets.
India’s steps to apply anti-money laundering policies to cryptocurrencies are aligned with moves made by regulated entities like banks and stock-brokers worldwide. In 2022, India imposed stringent tax rules on cryptocurrencies, including a levy on crypto trading.
Experts at Bloomberg believe India’s move could cause a plunge in domestic crypto trading volumes. Jaideep Reddy, counsel at law firm Trilegal, was quoted as saying, “[The latest anti-money laundering measure] is concerning as implementing the requisite compliance measures is likely to require time and resources.”
Interestingly, despite US financial regulator Securities and Exchange Commission’s (SEC) crackdown on crypto firms, stablecoins and virtual assets, the global cryptocurrency market capitalization is above $1.05 Trillion. It remains to be seen whether increasing regulatory oversight will trigger a decline in the global crypto market cap.
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