New Delhi, March 13 () The Enforcement Directorate is investigating several cases under the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA) related to crypto-currencies.
The Ministry of Finance in a written reply in Lok Sabha on Monday said that as of date, proceeds of crime amounting to Rs 953.70 crore have been attached, seized or freezed while five persons have been arrested and six Prosecution Complaints (PCs) including one supplementary PC have been filed before the Special Court, PMLA in these cases.
“Further, under Foreign Exchange management Act, 1999 (FEMA) assets amounting to Rs 289.28 crore have been seized under section 37 A of FEMA and one showcause notice to crypto-currency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its Directors under FEMA for transactions involving crypto-currencies worth Rs 2,790.74 crore has also been issued,” said the reply.
The reply said that the RBI has been cautioning users, holders and traders of Virtual Currencies (VCs) vide public notices on December 24, 2013; February 1, 2017 and December 5, 2017 that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks. RBI, vide its circular dated 31 May, 2021 has also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.
The Ministry in the reply informed that the Financial Action Task Force (FATF) Plenary discussed and adopted amendments to the FATF Standards to respond to the increasing use of virtual assets for money laundering and terrorist financing at the request of the G20 Ministers.
This includes an amendment to the FATF Recommendations and glossary to clarify to which businesses and activities the FATF requirements apply in the case of virtual assets.
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.
Strengthening the standards is part of a comprehensive approach that the FATF has developed to prevent the misuse of virtual asset activities for money laundering and terrorist financing, added the reply.
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