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ED seize assets worth Rs 1,243 crore in cryptocurrency criminal cases, says Sitharaman

The investigative body has taken action under the Prevention of Money Laundering Act and the Foreign Exchange Management Act.

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New Delhi: The Enforcement Directorate has seized assets worth Rs 1,243 crore in criminal cases associated with cryptocurrencies, Finance Minister Nirmala Sitharaman informed the Lok Sabha on Monday.

The Finance Minister stated in a reply in the lower house of Parliament that the ED is investigating several cases relating to cryptocurrencies under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and the Foreign Exchange Management Act, 1999 (FEMA).

“As on date, proceeds of crime amounting to Rs 953.70 crore have been attached/seized/freezed, 05 persons have been arrested and 06 Prosecution Complaints (PCs) including 01 supplementary PC have been filed before the Special Court, PMLA in these cases,” the Finance Minister said in her written reply. 

Under FEMA, she said, additional assets worth Rs 289.28 crore have been seized under Section 37A of the Act, and one show-cause notice has been issued to crypto-currency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its directors “for transactions involving cryptocurrencies worth Rs 2,790.74 crore.”

Sitharaman, however, did not specify the time period over which these actions were taken.

Security risks in virtual currencies

The Financial Action Task Force (FATF) Plenary has discussed and adopted amendments to its standards in response to the increasing use of “virtual assets” for money laundering and terrorist financing at the request of the G20 Ministers, she explained. 

“Exchanges and wallet providers will be required to implement AML/CFT (Anti Money Laundering/Combating the Financing of Terrorism) controls, and to be licensed or registered and supervised or monitored by national authorities,” the Finance Minister said. 

In addition, she stated that the Reserve Bank of India has been cautioning users and traders of virtual currencies (VCs) and has issued several public notices, such as on 24 December, 2013, 1 February, 2017, and 05 December, 2017. 

In those notices, the central bank cautioned that “dealing in VCs is associated with potential economic, financial, operational, legal, customer protection, and security related risks.”

In a 2021 circular, Sitharaman said that the RBI had instructed its regulated entities to continue to carry out customer due diligence processes for transactions in virtual currencies, in line with Know Your Customer (KYC), AML, and CFT obligations under the PMLA, 2002.


Also read: Cryptoverse: New breed of bitcoin NFTs sell for millions


 

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