Centre brings crypto assets under PMLA, wrongdoing can be probed by ED

business-standard.com:

The central government has brought the trading of cryptocurrency and digital assets under the ambit of the Prevention of Money Laundering Act through a gazette notification. The move comes even as the legislation to govern the crypto sector is still awaited, and at a time when India, as G20 President, is looking to drive the narrative among global leaders and regulators on the dangers of cryptocurrency.

This means any financial wrongdoing involving crypto assets can now be investigated by the Enforcement Directorate.

In a gazette notification dated March 7, the Finance Ministry’s Revenue Department stated that activities related to trading of crypto and digital assets would be covered under the PMLA.

These include exchange between virtual digital assets and fiat currencies, between one or more forms of virtual digital assets, and transfer of virtual digital assets. The activities would also include safekeeping or administration of virtual digital assets or instruments, enabling control over such assets and participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.

The definition of ‘virtual assets’ would be the same as that in the Income Tax Act, the notification stated. The definition includes cryptocurrencies and non-fungible tokens.

“Crypto transactions continue to lack transparency and the trail is difficult to establish. This move places the responsibility of bringing transparency to crypto trading on the crypto markets,” said Prashant Garg, Partner, technology consulting, EY India.

“The responsibility of maintaining transparency, identity and following regulations is on crypto exchanges. Globally, banks are severing ties with exchanges, putting a strain