Crypto under PMLA: CoinDCX registers itself as reporting entity with FIU

CoinDCX on Friday announced that it had registered itself as the "reporting entity" with the Ministry of Finance's Financial Intelligence Unit (FIU). As per the Prevention of Money Laundering Act (PMLA), 2002, a reporting entity is required to conduct KYC verification of the customers and maintain their records. If required, they also need to share records of suspicious transactions with the authorities.

"We welcome the government's move to include the VDA industry under the Prevention of Money Laundering Act, 2002 (PMLA). This will pave the road towards increased accountability and implementation of best practices by the VDA industry. As an exchange advocating for regulations and compliance, we are happy to be an FIU-registered reporting entity. As the industry continues to evolve, we will continue building trust and transparency, and focus on educating stakeholders to make VDA and Web3 safer and compliant," said Sumit Gupta, founder and chief executive officer (CEO) of CoinDCX.

Last week, the Centre brought cryptocurrencies under the ambit of the PMLA, 2002. According to the government notification, the exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered under money laundering laws.

The definition of "virtual assets" would include cryptocurrencies and non-fungible tokens.

Broadly, this means that any financial wrongdoing involving cryptocurrency assets can now be investigated by the Enforcement Directorate (ED). Additionally, the FIU-IND under the Department of Revenue will be responsible for receiving, processing, analysing, and disseminating the information relating to suspect financial transactions.