A top official in the Indian Ministry of Finance has stated the country has no plans to introduce legislation to regulate cryptocurrency sales and purchases.
In a written response to the Parliament’s lower house request, Minister Pankaj Chaudhary clarified that the country’s top financial regulator, the Financial Intelligence Unit (FIU), has the required legislative powers to oversee and manage critical aspects of the sector, such as money laundering prevention and terrorism financing. The Minister also noted that the country’s other law enforcement agencies have the “mandate to address illicit activities under existing legal provisions.”
The subject of regulating cryptocurrency in India remains a contentious issue as the government stakeholders involved hold differing opinions. The Reserve Bank of India has previously pushed for a total ban on digital assets, a stark contrast to the Ministry of Finance’s appeal for international collaboration to create a comprehensive regulatory framework to reap the full potential benefits of blockchain technology.
Chaudhary also emphazised that, under India’s leadership, the G20 agreed on a joint framework for regulating cryptocurrencies and managing related risks, particularly in developing countries last year.
Since last year, India’s finance ministry has taken a stricter stance on cryptocurrency exchanges. Binance, in particular, has been the target of these aggressive measures to curb what is tagged as a lack of compliance with the country’s regulations. The exchange was one of nine major foreign crypto platforms that the FIU served show-cause notices for operating illegally and failing to comply with anti-money laundering regulations. Other exchanges affected include KuCoin, Kraken, and Huobi.
Recently, the Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI) issued another show cause notice to the crypto exchange, demanding it pay 7.22 billion rupees (approximately $86 million), which it allegedly defaulted in goods and services tax (GST). The notice alleges that Binance collected fees from Indian users for trading virtual digital assets without proper registration under the Indian GST framework.
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