Concerns Over Terror Financing and Crypto Regulation in India
Understanding the Use of Cryptocurrency in Criminal Activities
The recent report by the Financial Intelligence Unit (FIU) of India raises serious concerns over cryptocurrency in India, highlighting its alleged use in terror financing, drug trafficking, and other serious criminal activities. The FIU's typologies report for virtual digital assets (VDAs) was prepared during the 2023-24 financial year after analyzing numerous suspicious transaction reports (STRs) from the sector.
Key Findings from the FIU Report
- The report observes high volumes of cryptocurrency transactions linked to illegal activities like money laundering and illicit betting.
- It emphasizes the need for crypto regulation in India amidst these growing concerns.
- Particularly, the interaction between cryptocurrency and secessionist activities was flagged numerous times.
Current Regulatory Environment
India is currently shaping a regulatory framework for crypto regulation. Although income from cryptocurrency transactions has been taxed at a flat rate of 30% since 2022, the asset itself remains unregulated. This has led to fears that money laundering through crypto persists largely unchecked.
Future Implications
The FIU has shared intelligence with law enforcement agencies, but the challenges remain significant. With the rapid evolution of the cryptocurrency landscape in India, there is an urgent need for regulatory measures to prevent illicit usage without stifling innovation.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.