Crypto Crimes: Legal Challenges and Regulation of Cryptocurrency in India.

Abstract

Cryptocurrencies have gained substantial traction globally, including in India, leading to an increase in crypto-related crimes and posing significant legal challenges. The legal landscape in India is complex and evolving, with the Reserve Bank of India's initial ban in 2018 being overturned by the Supreme Court in 2020. However, the regulatory framework remains ambiguous. The anonymity and pseudonymity of cryptocurrency transactions make them attractive for money laundering, tax evasion, and other economic crimes, exacerbated by the lack of clear regulations. The Indian government has proposed measures, such as the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to ban private cryptocurrencies and introduce a Central Bank Digital Currency (CBDC). Cryptocurrencies are now also covered under the Prevention of Money Laundering Act (PMLA), requiring exchanges to perform KYC procedures and report suspicious activities. Despite these efforts, debates continue about balancing innovation with regulation. The Securities and Exchange Board of India (SEBI) has suggested a multi-regulator framework to oversee cryptocurrencies, reflecting the complex regulatory environment. India's approach to regulating cryptocurrencies must address legal challenges while fostering innovation and protecting investors. Ongoing efforts to develop a robust regulatory framework are crucial for shaping the future of cryptocurrencies in India and their role in economic crimes.