Govt ropes in cryptocurrency trade in anti-money laundering law. How does it help market, investors?

livemint.com:

Finance Ministry has tweaked the anti-money laundering law by bringing cryptocurrencies and other virtual digital assets trade under the ambit. This means that exchanges, custodians, wallet providers, among others in crypto-related trade will fall under the Prevention of Money Laundering Act. Also, the ministry modified the definition of ownership in virtual assets. This move is seen as a positive by the cryptocurrency market.

In a notification on March 7th, FinMin stated that the exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets, and the transfer of virtual digital assets --- will come under PMLA.

Also, the safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets --- will be covered under the Act.

Further, in regards to ownership, the ministry directed that any individual or group who holds about 10% ownership in the client of a 'reporting entity' will be seen as the beneficial owner as against the earlier threshold of 25% ownership.

Reporting entities are banks and financial institutions, firms that are involved in sectors such as real estate and jewellery. The ministry has also included casinos and crypto or virtual digital assets.

Punit Agarwal, Founder of KoinX said, "The Government of India has recently made an official announcement stating that all crypto businesses, including exchanges, custodians, wallet providers, and others, will be subjected to the Prevention of Money Laundering Act of 2022 (PMLA). This move is a significant step forward in providing regulatory clarity for the crypto industry in India."

By bringing crypto businesses