India is gearing up to launch an extensive international database of cryptocurrency exchanges to aid authorities in tackling crimes associated with cryptocurrencies.
This move is in line with India’s efforts to conform to global regulatory norms for digital assets.
According to a report by The Economic Times, the unveiling of this database is anticipated by the close of this fiscal year.
Global Database to Help Law Enforcement Agencies Combat Crime
India’s forthcoming international database for crypto exchanges is expected to be instrumental in delivering essential insights on digital assets. This will empower agencies like the Enforcement Directorate (ED), the Income Tax Department, and the Central Bureau of Investigation (CBI) to more effectively oversee and pinpoint their involvement in illicit actions, including money laundering.
Additionally, as previously highlighted, the Organisation for Economic Co-operation and Development (OECD) unveiled its Crypto-Asset Reporting Framework (CARF). This framework is primarily oriented towards collating tax-specific data pertaining to cryptocurrency transactions.
A standout feature of India’s impending crypto exchange database is its coverage of cryptocurrency exchanges functioning within the dark web.
Representatives from the Financial Intelligence Unit (FIU) have indicated that India is earnestly pursuing collaboration with other countries to gather more insights into these hidden exchanges.
Data from the Financial Intelligence Unit (FIU) shows that, between 2019 and 2021, an estimated Rs 28,000 crore ($3.3 billion) in cryptocurrencies were channeled into drug-related dealings.
Crypto Intelligence and Analysis Tool Under Development
As previously mentioned, the Home Ministry is in the process of creating the Cryptocurrency Intelligence and Analysis Tool (CIAT).
This tool is specifically designed to oversee crypto transactions occurring within the dark web.
While its primary objective is to assist law enforcement agencies, the international database on cryptocurrency exchanges is anticipated to benefit a wider range of institutions.
Entities like the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) will find this database immensely useful, especially in investigations related to money laundering.
At the moment, India faces challenges in reigning in crypto-associated malpractices due to the absence of definitive regulations. Nevertheless, there’s a noticeable shift in the central government’s stance towards cryptocurrency regulations.