Bitcoin usage can attract anti-money laundering law

No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities, Arjun Ram Meghwal said in RS.

New Delhi, March 28: Trading in virtual currencies, including bitcoins, is not authorised and its usage in illegal activities may attract provisions of the anti-money laundering law, Parliament was informed on Tuesday.

"The absence of counter parties in usage of virtual currencies, like bitcoins, for illicit and illegal activities in anonymous/ pseudonymous systems can subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws," Minister of State for Finance Arjun Ram Meghwal said in a written reply in the Rajya Sabha.

"The creation, trading or usage of VCs, including bitcoins, as a medium of payment is not authorised by any central bank or monetary authority. No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities," Meghwal added.

The Reserve Bank of India had earlier stated that it had not given any licence/ authorisation to any entity/ company to operate such schemes or deal with bitcoin or any other virtual currency.

The apex bank had issued cautionary advice to the users, holders and traders of virtual currencies about the potential financial, operational, legal, customer protection and security-related risks that they are exposing themselves to.

IANS