Understanding the New Regulations on Cryptocurrency Trade

These new regulations mean that cryptocurrency trade, safekeeping, and related financial services now fall under anti-money laundering legislation. This move is in line with the global trend of enforcing digital asset platforms to comply with money laundering protocols.

• Notably, Indian cryptocurrency exchanges are now mandated to report any suspicious activities to the Financial Intelligence Unit India (FIU-IND).
• This move aligns with the global trend of ensuring digital asset platforms comply with anti-money laundering protocols.
• As cryptocurrencies, Web3, and other virtual assets are new and evolving sectors, they require international collaboration to establish effective legislation.
• Recently, the 2022-23 budget introduced a 30% tax on income from cryptocurrencies and other virtual assets.
• Additionally, a 1% tax deduction at source (TDS) was introduced for transactions in similar assets exceeding a certain limit. Gifts in cryptocurrencies and digital assets are also subject to taxation.

To understand more about the anti-money laundering laws, you can refer to the information on the Prevention of Money Laundering Act.

Here are some additional details to help understand the terms related to this topic:

• Cryptocurrency: This is a digital or virtual currency that uses cryptography for security. The ownership records of these currencies are stored in a digital database.
• Virtual digital asset: This refers to any code or number or token generated through cryptographic means that has inherent value.
• Money laundering: This illegal practice involves disguising the origin of large amounts of money obtained from illicit activities such as drug trafficking, terrorism financing, and corruption.
• Financial Intelligence Unit India (FIU-IND): This is an organization under the Department of Revenue responsible for collecting financial intelligence about offenses under the Prevention of Money Laundering Act, 2002.