Finance Ministry in Parliament on Crypto:Â On the first day of the winter session of Parliament, Minister of State for Finance Pankaj Chaudhary, on behalf of the Finance Ministry, gave important information related to cryptocurrency in the Lok Sabha. The Finance Ministry said that 28 crypto exchanges or virtual digital asset service providers in India have registered with the Financial Intelligence Unit-India. According to Pankaj Chaudhary, the registration process for offshore crypto exchanges and virtual digital asset service providers is going on.Â
Minister of State for Finance gave important information
The Minister of State for Finance told Parliament on December 4 that apart from being registered in the country, offshore crypto exchanges are required to follow anti-money laundering and CFT guidelines (rules against funding of terrorism) under PMLA. If offshore platforms do not follow the guidelines, appropriate action will be taken against them under the Prevention of Money Laundering Act (PMLA).Â
Which companies have registered so far?
These 28 companies include the names of companies like CoinX, Unocoin, Bitbns, Zebpay, WazirX, Coinswitch, CoinswitchX and Rario. There are also crypto exchanges like Binance, Coinbase which are serving cryptocurrency users.
The government was asked questions regarding cryptocurrency
On the first day of the winter session, Lok Sabha MP Lavu Shri Krishna Devarayalu raised questions about the increasing business of cryptocurrency in the country. He asked whether anti-money laundering guidelines and reporting requirements also apply to offshore crypto exchanges in the Indian market?
What is the government doing to regulate this risky financial asset so that crypto investors do not suffer losses? Minister of State for Finance Pankaj Choudhary said that, yes, rules related to guidelines and reporting requirements apply to offshore crypto exchanges serving the Indian market.Â
What are offshore exchanges?
This step of the government is a big relief for Indian crypto exchanges because in the last few years, Indian crypto exchanges have been witnessing a decline in the trading volumes on their platforms.
Crypto users are choosing offshore exchanges to try to avoid paying 30 percent tax on income. Actually, 1 percent TDS has to be paid on profit from Virtual Digital Asset (VDA) and purchase and sale transactions of more than Rs 10,000.
What is the government’s preparation for strictness on cryptocurrency business?
In March 2023, crypto or virtual asset industries were brought under the purview of the Prevention of Money Laundering Act 2002 (PMLA). Under this, the Finance Ministry included Virtual Digital Assets (VDA) or crypto exchanges and intermediaries as reporting entities under PMLA.
Under the rules, it has been made mandatory for crypto exchanges to report any suspicious activity to the Financial Intelligence Unit-India. In this, it was made mandatory for crypto exchanges with Virtual Digital Asset Service Providers (VDA SP) to do KYC of their platform users and customers.
Institutions falling under the reporting scope of PMLA are required to maintain KYC details and other documents related to financial transactions of customers and owners.
