Crypto traders in India must comply with anti-money laundering rules, which require them to preserve transaction records for at least a decade.
From now on, India’s crypto sector must comply with strict money laundering provisions.
The news marks a new attempt by the Indian government to tighten rules applied to the whole crypto industry.
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On March 7th, the Ministry of Finance revealed the new rules via a notice. The new rules are set to align the Asian country with global crypto regulations.
While the notice misses some details, India’s AML rules obligate all financial institutions to maintain records for at least ten years. The institutions must produce these records on demand and implement Know Your Customer (KYC) procedures.
The Indian crypto industry reacted to the news positively. CoinSwitch co-founder, Ashish Singhal, lauded the notice on Twitter. The man stated:
India’s Ministry of Finance notification to bring VDA transactions under PMLA is a positive step in recognizing the sector. This will strengthen our collective efforts to prevent VDAs from being misused by bad actors. CoinSwitch has always prioritized KYC & responsible use of crypto.
WazirX Founder Nischal Shetty also praised the news on Twitter. Shetty claims it is a great step “towards regulating the crypto industry in India.”
In 2022, the country imposed stricter rules on crypto taxation, including a 30% levy on crypto trades. At the time, it caused crypto trading volumes in the country to fall significantly.
On top of that, India announced a total ban on crypto advertising and sponsorship in the local women’s cricket league. The prohibition followed a similar ban imposed on the men’s league in 2022.
During the 2023 celebration of India’s first presidency at the G20, the Indian Finance Minister, Nirmala Sitharaman, called for a coordinated global effort to regulate the crypto sector.