Wednesday, 12 June 2024
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CryptoIndia

Cryptocurrency Legalization and Fraud Prevention: The Indian Ministry of Finance

On Monday, the Indian government responded to two sets of inquiries about cryptocurrencies in the Lok Sabha, the lower chamber of the Indian parliament. Both “whether the government plans to legalize cryptocurrency in the country” and “what impact cryptocurrency will have on the common people, especially youth” are among the questions posed in the first set to the minister of finance.

The Minister of State for Finance, Shri Pankaj Chaudhary, repeated his prior response to the legislature. In India, cryptocurrency assets are presently unregulated. Due to the inherently international nature of crypto assets, regulation arbitrage must be avoided, he said.

Prevention of Crypto Fraud

According to the minister, the Reserve Bank of India (RBI), the central bank of the country, has warned users, holders, and traders of virtual currencies (VCs) of the potential risks associated with virtual currencies (VCs), including economic, financial, operational, legal, security, and customer protection risks.

While the Indian government is still working on a cryptocurrency bill, cryptocurrency revenue is already taxed in India at a rate of 30%, and cryptocurrency transactions are subject to a 1% tax deducted at source (TDS).

  • On Monday, the Indian government responded to two sets of inquiries about cryptocurrencies.
  • RBI has warned virtual currencies (VC) traders of the potential risks associated with VCs.
  • Cryptocurrency frauds are handled by current laws against fraud and cybercrime.

The question of whether cryptocurrency-related frauds have increased over the past few years, what measures the government has taken to prevent such frauds, and whether all cryptocurrency exchanges operating in the nation are compliant with international financial regulations were put to the finance minister in the Lok Sabha.

In India, cryptocurrency assets are presently unregulated. Cryptocurrency frauds are handled by current laws against fraud and cybercrime, Minister Chaudhary retorted, adding that it is up to the states and Union Territories (UTs) to look into and prosecute such offenses.

He went on to say that the Cyber & Information Security Division has a reporting portal for crypto-related frauds that was recently introduced by the Indian Ministry of Home Affairs.

He continued, “The Enforcement Directorate [ED] is investigating several cases connected to crypto assets under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA).

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