Indian government issues new rules that places cryptocurrency trading and NFTs under "Money Laundering Provisions."

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The Indian government has issued a new rule that includes virtual assets, cryptocurrency trading, and non-financial transactions (NFTs). Measures are being taken to restrict the misuse of digital assets, with the ED overseeing the procedure.

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The latest step taken by the Indian government to strengthen control over digital assets is the imposition of anti-money laundering regulations on the crypto market

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PMLA (The Prevention of Money Laundering Act) would apply to transactions involving online digital assets, the government stated in a notification.

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The notification further stated that involvement in financial services relating to the offer & sale of digital assets as well as the administration or safekeeping of those assets will be included.

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"Engagement in and providing financial services pertaining to an issuer's offer & sale of an online virtual asset... For the specific purpose of this notification, the term "virtual digital asset" shall have the exact same meaning as defined in Clause (47A) of Sec2 of the Income-Tax Act, 1961 (43 of 1961) "According to a gazette paper published by Indian govt.

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The Income Tax Act defines a "virtual digital asset" as any data &information, code, number, or token that is produced using cryptographic techniques or any other method and can be entitled by any name, (not being Indian currency or foreign currency)

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The Enforcement Directorate, which is responsible for investigating cases of money laundering & forex fraud, has already begun probing into cryptocurrency companies, such as the exchanges CoinSwitch, Wazir & Kuber.

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It requires cryptocurrency businesses to adhere to the same KYC, anti-money laundering, and due diligence standards as banking and other financial institutions, which are classified as reporting organizations under the PMLA.

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