• UGI USER
  • Jan 03, 2024
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FIU IND’S ACTION AGAINST VIRTUAL ASSET PROVIDERS

Why in the News?

  • On December 28, Financial Intelligence Unit -India (FIU IND) issued show-cause notices to nine offshore virtual digital asset service providers (*VDA SPs), including Binance, Kucoin, Huobi, Bitfinex, and MEXC Global.
  • The notices cite “operating illegally” without complying with the Prevention of Money Laundering Act, 2002 (PMLA).
  • A request has been made to the Ministry of Electronics and Information Technology to block URLs of the mentioned entities.

About Virtual Digital Asset (VDA ):

  • Virtual Digital Asset (VDA) refers to digital or crypto assets existing purely in electronic form.
  • Exist only in the digital world, not represented by physical assets.
  • Example: Cryptocurrencies like Bitcoin, Ethereum, and digital tokens.
  • Use cryptography for secure transactions and record-keeping.
  • Traded on specialized platforms or held in digital wallets.
  • Potential for high returns but also high risks and volatility
About Prevention of Money Laundering Act(PMLA)

·   The PMLA enacted in 2002 addresses money laundering( the process of disguising illicitly gained funds to appear legitimate).

·   Enacted to fulfill India’s global commitment under the Vienna Convention, this criminal law aims to prevent money laundering, allowing property confiscation related to such activities.

·   The Enforcement Directorate (ED) is tasked with investigating, tracing assets from criminal proceeds, provisional attachment, prosecution, and property confiscation through Special courts.