Virtual Digital Asset Regulation

• 09 Mar 2023

On March 9, 2023, the Finance Ministryhas bought a range of virtual digital asset (VDA) transactions under the ambit of Prevention of Money Laundering Act (PMLA) 2002, to curb money laundering and illegal activities involving virtual digital assets.

• Virtual digital assets were defined as any code or number or token generated through cryptographic means with the promise or representation of having inherent value.
• Any exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, and transfer of virtual digital assets.
• Safekeeping or administration of virtual digital assets, instruments enabling control over virtual digital assets, and participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.
• As a result, VDA entities such as exchanges, custodians, or administrators handling customer funds will have to comply with PMLA laws and report suspicious transactions to the Financial Intelligence Unit India (FIU-IND) like banks do.