Benzinga - The Indian government has tightened its regulatory grip on cryptocurrencies by imposing money laundering provisions on the sector.
According to a notice released by the Finance Ministry on Tuesday, anti-money laundering legislation will now apply to cryptocurrency trading, safekeeping and related financial services.
This move by the Indian government aligns with a global trend of increasing scrutiny on digital asset platforms, which are required to adhere to anti-money laundering standards similar to those followed by regulated entities such as banks and stock brokers.
Jaideep Reddy, a counsel at the law firm Trilegal, stated India's move reflects the international regulatory trend that demands greater scrutiny of digital assets.
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Last year, the Indian government implemented stricter tax rules on the cryptocurrency sector, including a levy on trading.
These measures, coupled with a global downturn in digital assets, caused a significant decrease in domestic trading volumes.
The Enforcement Directorate, responsible for investigating money laundering and forex violation cases in India, has already launched investigations into crypto companies such as CoinSwitch Kuber and WazirX.
The latest anti-money laundering measures may pose a challenge for these companies, as implementing compliance measures can be time-consuming and require significant resources.
Reddy expressed concerns, stating that "implementing the requisite compliance measures is likely to require time and resources."
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