India's Ministry of Finance has disclosed that the country's Enforcement Directorate is currently investigating several crypto cases for money laundering schemes and has already seized $115.5 million in such crimes, according to a report by TechCrunch.
The announcement comes as the Indian government pushes forward with plans to better scrutinize cryptocurrency firms despite its previous reluctance to formulate a blanket law to regulate virtual digital assets.
5 Arrested Individuals
The Indian crime-fighting agency has arrested five individuals in connection to cryptocurrency-related crimes, and in the past, it has issued a show cause notice to local exchange WazirX and its directors for crypto transactions exceeding $338 million.
The latest crackdown by the authorities comes amid tremulous market conditions in the crypto space.
Recently, the Ministry of Finance announced that crypto in the South Asian market will be governed by anti-money laundering rules, with crypto exchanges, NFT providers, and custody wallet operators being required to monitor suspicious financial activities.
The firms operating in the crypto space will be required to perform know your customer (KYC) verifications. "Exchanges and wallet providers will be required to implement AML/CFT controls, and to be licensed or registered and supervised or monitored by national authorities," said the Ministry of Finance.
India's government has also been mulling a proposal to ban all cryptocurrencies except for those issued by the state, but the proposal has yet to be passed into law.
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Global Regulatory Framework
India, during its current G20 presidency, has stated its intention to prioritize the establishment of a comprehensive global regulatory framework for unbacked crypto assets, stablecoins, and decentralized finance.
This move follows the country's strict approach to cryptocurrencies in the previous year, which involved imposing a 30% tax on all gains and a 1% deduction on each crypto transaction, according to TechCrunch.
As a result, local exchanges such as CoinSwitch Kuber and CoinDCX have seen a significant decline in transactions.
Binance, the world's largest cryptocurrency exchange, has also faced challenges operating in India due to the country's unfavorable regulatory environment. According to Binance's founder and CEO, Changpeng "CZ" Zhao, the company is attempting to communicate its concerns about local taxation policies to the Indian authorities.
However, CZ acknowledged that such changes usually take a long time to implement.
Despite the growing interest in cryptocurrencies, they remain largely unregulated in India. The country's central bank, the Reserve Bank of India, banned banks from dealing with cryptocurrency firms in 2018, though the Supreme Court later lifted the ban in 2020.
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