Indian Finance Ministry: Crypto Trading Is Now Subject to AML Laws

• Indian Finance Ministry said crypto trading is now subject to money laundering laws.
• The AML regulation comes after multiple crypto-related scandals.
• Previously, India imposed a capital gains tax of 30% on crypto transactions.

The government of India has taken yet another step toward regulating digital assets by imposing money laundering rules on the crypto industry. In a notification on Tuesday, the Indian Finance Ministry said crypto trading, safekeeping, and similar financial services are now subject to anti-money laundering regulations.

Bloomberg quoted Jaideep Reddy, counsel at law firm Trilegal, saying:

The move by India aligns with a global trend of requiring digital-asset platforms to follow anti-money laundering standards similar to those followed by other regulated entities like banks or stock brokers.

The new anti-money laundering regulation is coming after multiple reports of crypto-related scandals in the country. For instance, in November last year, the hackers who took down the All India Institute of Medical Sciences (AIIMS) internet server demanded over $24 million worth of cryptocurrencies in ransom.

In the same month, the Indian directorate of enforcement (ED) seized over $2.5 million worth of Bitcoin connected to the fraudulent gaming called E-nuggets. The Indian authority had ransacked the Binance user’s wallet connected to the mobile gaming application, freezing 150.22 Bitcoin.

And In September, the regulator froze the account balances of various Chinese-controlled entities in connection with a probe into the app-based token HPZ. The withheld amount was Rs. 9.82 crores, equivalent to $1,218,529.39.

Previously, the Indian government imposed a capital gains tax of 30% on crypto transactions and a 1% tax deducted at source (TDS) on Indians buying or selling crypto. According to a recent report, Indians lost interest in trading on local crypto exchanges following the tax regime.

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