Virtual Digital Assets Service Providers (VDA SPs)
Recently, Service providers dealing with Virtual Digital Assets (VDA SPs) have received compliance Show Cause Notices from the Financial Intelligence Unit India (FIU IND).
- VDA SPs operating within India, both offshore and onshore, and involved in activities such as exchanging virtual digital assets and fiat currencies, transferring virtual digital assets, safeguarding or managing virtual digital assets, or facilitating control over virtual digital assets, are mandated to register with FIU IND as Reporting Entities.
- They must adhere to the obligations outlined in the Prevention of Money Laundering Act (PMLA) of 2002. This obligation is tied to their activities and is not dependent on their physical presence in India.
- The regulations impose reporting, record-keeping, and other obligations on VDA SPs under the PML Act, including registration with FIU IND.
Financial Intelligence Unit India:
- FIU-IND, established in 2004 and functioning under the Finance Ministry of the Government of India, serves as the central national agency for receiving, processing, analyzing, and disseminating information regarding suspicious financial transactions to enforcement agencies and foreign Financial Intelligence Units (FIUs).
- It is tasked with coordinating and bolstering the efforts of national and international intelligence, investigation, and enforcement agencies in the global fight against money laundering and terrorism financing. FIU-IND operates independently and reports directly to the Economic Intelligence Council (EIC), led by the Finance Minister.
- The personnel of FIU-IND are drawn from various organizations, including the Central Board of Direct Taxes (CBDT), Central Board of Excise and Customs (CBEC), Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Department of Legal Affairs, and intelligence agencies. The Director heads the FIU-IND.