ED is investigating several cases related to cryptocurrencies: Center
The Enforcement Directorate is investigating several cases under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and the Foreign Exchange Management Act, 1999 (FEMA) relating to cryptocurrencies.
The Finance Ministry, in a written reply in the Lok Sabha on Monday, said that as on date, proceeds of crime amounting to Rs 953.70 crore have been attached, seized or frozen while five persons have been arrested and six chargesheets (PCs) including an Additional Complainant PC have been filed before the Special Court, PMLA in these matters.
“Further, under the Foreign Exchange Management Act, 1999 (FEMA) assets of Rs 289.28 crore have been seized under Section 37 A of FEMA and a show cause notice to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its directors under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore have also been issued,” the reply said.
The reply said that the RBI has warned users, holders and traders of virtual currencies (VCs) by public notices on 24 December 2013; 1 February 2017 and 5 December 2017 that trading with VCs is associated with potential economic, financial, operational, legal, customer protection and security-related risks. The RBI, vide its circular dated 31 May 2021, has also advised its regulated entities to continue conducting customer due diligence processes for transactions in VCs, in line with regulations governing Know Your Customer (KYC) standards, Anti- Money Laundering (AML) ), Countering Financing of Terrorism (CFT), Obligations under the Prevention of Money Laundering Act (PMLA), 2002, etc.
The ministry informed in its response that the Financial Action Task Force (FATF) plenary discussed and adopted changes to the FATF standards to respond to the growing 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 which businesses and activities the FATF requirements apply to virtual assets.
Exchanges and wallet providers will be required to implement AML/CFT controls, and be licensed or registered and monitored or supervised 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, the response added.
— IANS
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