Why is it in the News?

India's Financial Intelligence Unit has issued show cause notices to nine offshore crypto-currency operators, including Binance, for not complying with the anti-money laundering PML Act.

About the Financial Intelligence Unit India:

• Financial Intelligence Unit – India (FIU-IND) was set by the Government of India in November 2004 as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
• FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and financing of terrorism.
• It is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.

Key Functions of FIU-IND:

• Information Collection: Act as the central hub for receiving various reports, including Cash Transaction Reports (CTRs), Non-Profit Organisation Transaction Reports (NTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on the Purchase or Sale of Immovable Property (IPRs), and Suspicious Transaction Reports (STRs) from diverse reporting entities.
• Information Analysis: Analyze the received information to unveil transaction patterns indicative of potential money laundering and associated criminal activities.
• Information Sharing: Collaborate by sharing intelligence with national intelligence/law enforcement agencies, national regulatory authorities, and foreign Financial Intelligence Units, fostering a collective effort against financial crimes.
• Central Repository: Establish and maintain a national database by consolidating reports received from reporting entities.
• Coordination: Strengthen the collection and sharing of financial intelligence through efficient national, regional, and global networks to combat money laundering and related crimes.
• Research and Analysis: Conduct ongoing monitoring and identification of strategic areas related to money laundering trends, typologies, and developments.

What are Virtual Digital Assets?

• As per the Income Tax Act, a 'virtual digital asset' is described as any information, code, number, or token (excluding Indian currency or foreign currency) generated through cryptographic means and blockchain technologies.
• These assets can be electronically transferred, stored, or traded.
• The definition explicitly covers non-fungible tokens (NFTs) or tokens of a similar nature, regardless of nomenclature.