The Indian government’s harsh stance against virtual digital assets has been affecting the crypto market and investors. However, in the latest development, India’s Financial Intelligence Unit has raised concerns about nine offshore Virtual Digital Assets (VDA) service providers. However, this list also includes Binance for allegedly violating the Prevention of Money Laundering Act (PMLA) of 2002.
India intensifies crypto regulations
According to reports, the Financial Intelligence Unit has issued show cause notices to crypto entities for invoking Section 13 of the PMLA. This rule empowers authorities to take action for non-compliance with Section 12. It highlights dealing with intentional undervaluation of transactions and failure to furnish requested transaction documents.
It is important to note that Binance, the world’s largest cryptocurrency exchange, is among the entities facing scrutiny. The authority has written to the Ministry of Electronics and Information Technology, urging the blocking of URLs linked to these entities.
The list of entities under investigation includes other major crypto exchanges like Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, with subsidiaries spread across various jurisdictions.
The report suggests that these nine entities were brought under the Anti Money Laundering or Counter Financing of Terrorism (AML-CFT) framework in March. However, most of these exchanges or their subsidiaries are allegedly incorporated in tax havens such as Grand Cayman Islands, Seychelles, Switzerland, among others.
This development comes amid the recent emerging legal troubles for Binance, As reported earlier, a US court ordered the platform and its former CEO, Changpeng Zhao (CZ) to pay $2.7 billion and $150 million, respectively. It was based on charges brought by the US Commodity Futures Trading Commission (CFTC).
What’s next in India?
The Financial Intelligence Unit’s actions highlight the government’s increasing vigilance in regulating crypto space. These measures align with the New Delhi Leaders’ declaration adopted by G20 nations.
It points out a coordinated and global policy and regulatory framework on crypto assets. However, India’s crypto policy has faced controversies and the recent responses indicate the government’s intent to implement effective regulation.
Earlier, experts had suggested revisiting the 1% transaction tax deducted at source (TDS) to stimulate industry growth. Though no official changes have been made as of yet.
