Crypto Firms in India Now Considered ‘Reporting Entities’ on Par With Banks

• Know Your Customer standards will become more than simply a recommendation.
• Crypto and NFT businesses in India are now considered “reporting entities.”

Despite the fact that the Indian government and central bank have been skeptical of the cryptocurrency market, they are now striving to provide some regulatory clarity to the topic.

Crypto and NFT businesses in India are considered “reporting entities” under the country’s Prevention of Money Laundering Act (PMLA), according to a notice released by the Ministry of Finance. Hence, crypto companies in India will be subject to the same reporting requirements and know-your-customer (KYC) regulations as other market participants, such as banks, payments system operators, securities intermediaries, etc.

Hence, Know Your Customer standards will become more than simply a recommendation for crypto businesses; they will be required by law. As a result, the Financial Intelligence Unit of India now requires all crypto firms in the country to report on the legitimacy of any potentially illegal transactions.

Welcoming Update

Given that the Reserve Bank of India has previously considered a blanket ban on crypto, this is encouraging news. Nirmala Sitharaman, India’s finance minister, raised the topic of establishing a unified crypto regulatory framework during the G20 conference held in Bengaluru last month.

Until now, however, the budget session of this year has not resulted in any crypto tax relief from the finance ministry. The cryptocurrency sector in India has shown a desire to work with authorities and has offered its cooperation in this regard.

According to the finance ministry, India hosted a conference for G20 member nations to explore how to come up with a common framework to tackle the challenges created by cryptocurrencies like bitcoin.