Amid the cryptocurrency scandals in 2022, there have been a lot questions regarding the regulations by the country. Shri Pankaj Chaudary, MoS, Finance have answered such questions regarding the Cryptocurrency Bill, Cryptocurrency and Virtual Digital Assets.
Regarding the Cryptocurrency Bill, the Ministry was asked about the current status of the Cryptocurrency Bill that was due for being tabled, the timeframe within which the bill would be tabled. Those answers were as follows-
Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation on the subject can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.
The Ministry of Finance is going to regulate the policy regarding cryptocurrency and various digital assets including NFTs and VDAs.
A question asked to the Ministry whether the Government proposes to restrict or regulate various VDAs, the features if any regulatations are laid down, the plans to forge international cooperation for regulating cryptocurrency. The MoS answered them as follows—
Currently, crpyto assets are unregulated in India. The government does not register crypto exchanges. Crypto assets by definition are borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.
On the contrary, the Ministry was asked about the details of crypto exchanges which are under investigation by the Government for money laundering and tax evasion cases? The response given was—
The Directorate of Enforcement is investigating several cases related to Crypto fraudswherein a few crypto exchanges have also been found involved in money laundering. Necessary action as per provisions of Prevention of Money Laundering Act, 2002 (PMLA) has been taken by the Directorate of Enforcement. As on 14.12.2022, proceeds of crime amounting to Rs. 907.48 crores have been attached/seized, 03 persons have been arrested and 04 Prosecution Complaints have been filed before the Special Court, PMLA, in these cases……..assets amounting to Rs. 289.68 crores have been seized [on] crypto exchange Zanmai Labs Pvt Ltd, known as WazirX, ………for transactions involving crypto assets worth Rs. 2,790.74 crore
About 12 such cases of money laundering and about Rs. 86 Cr of tax evaision has declared with about Rs. 110 Cr recovered including penalty and interest.
The Cryptocurrency Bill is expected during the budget session for this tenure of 2023-2024 expecting a proper regulation by the end of 2023.