India imposes money laundering provisions on cryptocurrency sector

Earlier in December, the Ministry of Finance told parliament that currently all policies on crypto assets, the regulatory ecosystem for cryptocurrencies and any legislation will require international collaboration, and that any legislation on the subject can be effective only with significant international collaboration to prevent regulatory arbitrage.

This is after the government in Budget 2022 announced that beginning April 1 of last year, all forms of virtual digital assets (VDA) or crypto assets that are sold at a profit would attract a tax of 30 percent. Those moves, as well as a global rout in digital assets, caused a plunge in domestic trading volumes.

Finance Minister Nirmala Sitharaman had in October 2022 said, there is a need to have some kind of regulation on cryptocurrencies and all countries will have to be together on it.

"No one will be able to singularly handle it... That (crypto) will also be part of India's (agenda during G-20 presidency)... We have been making a strong case for global regulation of cryptocurrencies to tackle the risks of money laundering and terror funding," she had then said.

However, Trilegal counsel Reddy told Bloomberg that the latest anti-money laundering measure is concerning as implementing the requisite compliance measures is likely to require time and resources.