Ministry of Finance brings virtual digital assets, fiat currencies under Prevention of Money-laundering Act, 2002

The Ministry of Finance has notified that the following activities will also fall under the ambit of “person carrying on designated business or profession” under the Prevention of Money-laundering Act, 2002 :

a) exchange between virtual digital assets and fiat currencies.
b) exchange between one or more forms of virtual digital assets.
c) transfer of virtual digital assets.
d) safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets.
e) participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.

Note : “virtual digital asset” shall have the same meaning assigned to it in clause (47A)* of section 2 of the Income-tax Act, 1961.

For a detailed read, please refer to the hyperlink below.

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*virtual digital asset under clause (47A) of section 2 of the Income-tax Act, 1961:

 (a) any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;

 (b) a non-fungible token or any other token of similar nature, by whatever name called;

 (c) any other digital asset, as the Central Government may, by notification in the Official Gazette specify:

 Provided that the Central Government may, by notification in the Official Gazette, exclude any digital asset from the definition of virtual digital asset subject to such conditions as may be specified therein.

Explanation.- For the purposes of this clause,–

 (a) “non-fungible token” means such digital asset as the Central Government may, by notification in the Official Gazette, specify;

 (b) the expressions “currency”, “foreign currency” and “Indian currency” shall have the same meanings as respectively assigned to them in clauses (h), (m) and (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).

Source : Ministry of Finance