Thanks to recent guidelines from the Indian Parliament, the cryptocurrency industry in India is witnessing significant changes. Get ready as controls tighten on foreign cryptocurrency exchanges, which are now required to comply with strict anti-money laundering and terrorist financing regulations.
A total of 28 offshore virtual digital asset (VDA) service providers are currently undergoing a similar registration process as foreign entities. Failure to follow these rules can have serious consequences for your offshore exchange.
Wait a minute, India’s cryptocurrency regulations have been significantly upgraded! Here’s the full story:
KYC Registration: VDA Giants are jumping in!
In a recent update from the Treasury, major players in the cryptocurrency world including WazirX, Coin DCX and Coinswitch have officially partnered with India’s Financial Intelligence Unit.
Under anti-money laundering laws, these entities, now referred to as “reporting entities”, are required to perform know-your-customer (KYC) procedures for their customers and platform users.
The rules extend to overseas cryptocurrency exchanges serving the Indian market and include potential legal action for non-compliance. Regulating cryptocurrency exchanges is an important step for the Indian government due to global concerns about fraud and terrorist links.
Also read: India’s Supreme Court rejects request to regulate cryptocurrency on grounds of legislative jurisdiction
Minister Pankaj Chaudhary speaks.
Finance Minister Pankaj Chaudhary confirmed these guidelines in the Lok Sabha meeting. The focus was on initiating the registration process for these VDA service providers.
Notable companies already registered include Neblio Technologies Pvt Ltd (Coin DCX), Zanmai Labs Pvt Ltd (WazirX), Bitcipher Labs LLP (Coinswitch), Nextgendev Solutions Pvt Ltd (CoinswitchX) and Awlencan Innovations India Ltd (Zebpay).
This move is in line with the requirements of anti-money laundering laws and highlights the need to maintain comprehensive KYC details, evidence of the identity of customers and beneficial owners, relevant account files and business correspondence.
Understanding India’s Cryptocurrency Strategy
Is this a strict crackdown on cryptocurrency assets or is India creating a comprehensive set of cryptocurrency rules? In a decisive move last September, the Indian government approved the expedited implementation of the Crypto Asset Reporting Framework (CARF).
This framework, which aims to standardize cryptocurrency transaction tax reporting, was included in the G20 declaration. It advocates improved crypto data sharing and tax transparency for foreign financial accounts.
India’s Prevention of Money Laundering Act (PMLA) and KYC norms mark a significant moment in the country’s cryptocurrency landscape, setting a new standard for compliance and regulatory expectations in the dynamic and rapidly evolving digital asset market.
Here are some more details: India’s Recommendations on Global Cryptocurrency Regulation: What You Need to Know