The Indian Government Gives Answers to Questions Regarding Cryptocurrency in Lok Sabha

The Indian Government Gives Answers to Questions Regarding Cryptocurrency in Lok Sabha

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The Indian government responded to specific questions raised in the Lok Sabha, the lower house of parliament, about its cryptocurrency law, enquiries into cryptocurrency exchanges, and virtual digital assets (VDA).

When asked whether the Indian government plans to regulate VDA in the country and the salient features of regulation, if any, laid down by the government for cryptocurrency and VDAS, Minister of State in Ministry of Finance Pankaj Chaudhary told Lok Sabha that crypto assets are currently unregulated in India. Pankaj Chaudhary was responding to a question about whether the Indian government proposes to regulate VDA in the country.

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NEW DELHI, INDIA – AUGUST 4: Security personnel deployed outside the Parliament House during the ongoing monsoon session on August 4, 2021 in New Delhi, India. (Photo by Arvind Yadav/Hindustan Times via Getty Images)

According to Chaudhary, cryptocurrency assets are borderless by definition and need international coordination in order to avoid regulatory arbitrage.

According to the Minister of State for Finance, “hence, any law for regulating or for banning may be successful only with major international cooperation on assessment of the risks and advantages and development of common taxonomy and standards.”

In response to a query on the amount of cryptocurrency exchanges that are officially recognized or registered in the country, Chaudhary said that the Indian government does not register cryptocurrency exchanges.

Members of parliament have made yet another set of inquiries regarding the information on cryptocurrency exchanges that are the subject of government investigations for money laundering and tax evasion. These investigations are being conducted by the government for the purpose of determining whether or not the exchanges violated any laws.

In response, Chaudhary states that the Directorate of Enforcement is investigating a number of instances involving fraudulent activity using cryptocurrencies, and that some cryptocurrency exchanges have been found to be engaged in money laundering.

Reportedly, the Directorate of Enforcement has taken the necessary measures in accordance with the requirements of the Prevention of Money Laundering Act, 2002 (PMLA), and as of the 14.12.2022, these instances have resulted in the seizure of Rs. 907.48 crores in criminal proceeds, the arrest of three individuals, and the filing of four prosecution complaints before the Special Court, PMLA.

In addition, assets to the value of Rs. 289.68 crores have been seized in accordance with Section 37A of the Foreign Exchange Management Act of 1999 (FEMA), and the cryptocurrency exchange WazirX and its Director have been issued a Show Cause Notice for transactions involving crypto assets to the value of Rs. 2,790.74 crores.

Additionally, the minister said that inquiries are being conducted on twelve cryptocurrency exchanges for evading the Goods and Services Tax (GST). When interest and other fees are included in, the total money that has been recovered to this point amounts to 110.97 crore rupees. In addition, there have been a total of four investigations that have been concluded, while the other eight instances are currently being looked at.

Compiled by Coinbold