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ARTICLE · 25 APRIL 2023

Cryptocurrency Trading Subject To Anti-Money Laundering Laws

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Digital currency has recently gained immense traction in India as an alternative investment opportunity. Due to its secure nature based on blockchain technology, it not only provides...

IndiaTechnology
Amit Jajoo
Amit Jajoo
Avik Biswas
Avik Biswas
Arunima Kumar
Arunima Kumar
Archit Sehgal
Archit Sehgal
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1. INTRODUCTION

1.1 Digital currency has recently gained immense traction in India as an alternative investment opportunity. Due to its secure nature based on blockchain technology, it not only provides anonymity to its users but also renders the transactions often immune to government intervention and scrutiny. The lack of regulation, one suspects, created an open market for unscrupulous entities to trade freely and misuse the market while staying anonymous. As a direct consequence, tracing such transactions (within and outside the country) becomes extremely difficult, which in turn exposes the cryptocurrency ecosystem to be a conduit of money laundering in India. Last year, the Directorate of Enforcement ("ED") probed several money laundering cases against companies running cryptocurrency exchanges. As per the official press release by the Ministry of Finance (February 6, 2023)1 , ED has attached proceeds of crime worth nearly INR 936 crores (~USD 113 million)

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