Lok Sabha Question No. 309 (UNSTARRED), answered on 2026-02-02
Subject: Investments made through Crypto Currencies
Ministry: FINANCE
Asked by: Dr. T Sumathy Alias Thamizhachi Thangapandian

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 309

TO BE ANSWERED ON 02.02.2026/ 13 Magha 1947 (Saka)

## Investments made Through Crypto Currencies

309 Dr. T Sumathy Alias Thamizhachi Thangapandian :

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has taken serious note on the huge investments made through crypto currencies, digital assets, fuel money laundering and illicit trades; and

(b)  if  so,  the  steps  taken  by  the  Government  to  control  the  misuse  of  digital  assets,  crypto currencies and Non-Fungible Tokens (NFTs)?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b): Crypto-assets/Virtual Digital Assets (VDAs), including Non-Fungible Tokens (NFTs), are  unregulated  in  India,  and  the  government  does  not  collect  data  on  these  assets.  However, notwithstanding  this,  the  Government  has  brought  the  sector  under  the  Financial  Intelligence Unit's  (FIU-IND)  regulatory  ambit  for  anti-money  laundering  (AML)  and  combating  the financing  of  terrorism  (CFT)  purposes,  making  VDA  service  providers  (VDASPs)  subject  to registration,  customer due diligence, record-keeping and suspicious transaction reporting obligations. Being the AML/CFT  regulator, FIU-IND  receives and analyses suspicious transaction  reports  submitted  by  VDASPs  and  disseminates  actionable  intelligence  with  law enforcement agencies to curb money laundering and terror financing activities. While FIU-IND has  taken  action  under  Section  13  of  the  PMLA,  2002,  against  non-compliant  VDASPs,  the Enforcement  Directorate  has  also  investigated  several  crypto-related  cases  under  PMLA, attaching/seizing/freezing proceeds of crime worth Rs. 4209.74 crore, arresting 29 persons, and filing 24 prosecution complaints. One accused has been declared a Fugitive Economic Offender.

Additionally, cases of tax evasion linked to VDAs have been detected by the Central Board of Direct Taxes (CBDT) on multiple occasions, and the Income Tax Department takes appropriate action as per the Income Tax Act, 1961. Wherever tax evasion is detected, necessary action, such as nudging taxpayers, e-verification, reassessment, survey, or search and seizure, is taken. The CBDT's  NUDGE  (Non-Intrusive  Usage  of  Data  to  Guide  and  Enable)  campaign  has  been launched to encourage voluntary compliance and enhance awareness regarding proper reporting of VDA transactions and payment of due taxes. Under this initiative, communications have been issued  to  identified  taxpayers  who  carried  out  VDA  transactions  but  did  not  disclose  them  in Schedule  VDA of their  Income-tax  Returns.  Data  analytics  tools,  Project  Insight  and  internal databases  are  used  to  match  information  on  VDA  transactions  with  disclosures  in  ITRs. Furthermore, the Prohibition of Benami Property Transactions Act, 1988, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, apply to all assets, including VDAs. The Benami Act enables prosecution where assets, including VDAs, are held benami, and the Black Money Act enables action against undisclosed foreign assets, including VDAs.

The Reserve Bank of India (RBI) has also cautioned users, holders and traders of VDAs vide its several public notices that dealing in these assets is associated with potential economic, financial, operational,  legal,  customer  protection  and  security  related  risks.  RBI,  vide  its  circular  dated May  31,  2021,  has  also  advised  its  regulated  entities  to  continue  to  carry  out  customer  due diligence processes for transactions in  VDAs, in line with regulations governing standards for Know  Your  Customer  (KYC),  Anti-  Money  Laundering  (AML),  Combating  of  Financing  of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.

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