ED investigating several cryptocurrency-related crimes; proceeds worth Rs 953 crore seized : FM

Proceeds amounting to Rs 953.70 crore from felony actions involving cryptocurrencies have been seized, frozen or connected beneath the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA), finance minister Nirmala Sitharaman mentioned in Parliament on Monday.

She was responding to a query within the Lok Sabha on whether or not the federal government was conscious of cryptocurrencies getting used for cash laundering.

“…under FEMA, assets amounting to Rs 289.28 crores have been seized…and show cause notice to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its directors under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore has also been issued,” she mentioned. The motion towards WazirX was taken by the Directorate of Enforcement (ED) in 2021.

The finance minister additionally knowledgeable the Parliament that public notices have been circulated by the Reserve Bank of India (RBI) cautioning individuals relating to cryptocurrencies.

“RBI has been cautioning users, holders and traders of virtual currencies (VCs) vide public notices on 24 December, 2013, 01 February, 2017 and 05 December, 2017 that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks,” she famous in her reply.

“RBI, vide its circular dated 31 May, 2021 has also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc,” she added.

Notably, final week, the finance ministry tightened the definition of the Prevention of Money Laundering Act (PMLA) and included cryptocurrencies within the definition of the anti cash laundering regulation. With this, crypto exchanges and intermediaries coping with digital digital belongings will now be required to carry out KYC of their purchasers and customers of the platform. As per the amendments, entities dealing in digital digital belongings (VDAs) will now be thought of ‘reporting entity’ beneath the PMLA.

Entities concerned within the trade between VDAs and Fiat currencies or switch of VDAs or safekeeping and administration of VDAs, and participation in monetary providers associated to an issuer’s provide and sale of a VDA can be ‘reporting entity’ for the aim of the PMLA. These entities have additionally been mandated to maintain information of purchasers for 5 years even after closing of business.

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