Cryptocurrencies are facing a tough time in India as there are rumors of a probable ban under the Prevention of Money Laundering Act [PMLA]. The strong crypto community in the country who owns and uses crypto are wary of this progress, and how it would impact them. However, Vijay Dalmia, an advocate at Vaish Associates, gave clarity as to which transactions could be deemed legal and which ones were illegal in India and foreign countries.
Dalmia, in an interview with Crypto Kanoon, an Indian blockchain and crypto news portal, talked about the spending limit of an individual on foreign land. He said that the limit for an individual to spend in foreign countries is $2,50,000 in a year and Reserve Bank of India [RBI] outlined certain guidelines which should be abided by.
Even though citizens do not have to seek approval from the RBI to spend money, there are certain activities that they can’t indulge in, like the purchase of cryptocurrencies. As the money that is sent from RBI is converted into USD to pay and this conversion takes place in a bank, where you have to declare the purpose of spending the specific amount. Thus, this declaration will prohibit an Indian from buying any cryptos outside of India.
If an individual is arrested under the Prevention of Money Laundering Act, they will serve seven years of jail time, adding to the punishment from the predicate offense. The advocate also informed that the money involved in money laundering will be seized by the Enforcement Directorate [ED] and this recovery can be in cash, gold, property or even, cryptocurrency.
Dalmia further explained what a person earning in crypto can do if the ban is levied and clarified whether this earning was legal or illegal payment.