Crypto Crimes: Indian Cryptocurrency Regulation and Legal Difficulties

Abstract

Globally, including in India, cryptocurrencies have become more popular. This has resulted in a rise in crimes associated to cryptocurrencies and presented serious 
legal issues. India's legal system is complicated and constantly changing; in 2020, the Supreme Court reversed the Reserve Bank of India's 2018 prohibition. The 
regulatory structure is still unclear, however. Money laundering, tax evasion, and other economic crimes find cryptocurrency transactions appealing due to their 
anonymity and pseudonymity, which is made worse by the absence of clear restrictions. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 
is one of the steps the Indian government has suggested to outlaw private cryptocurrencies and establish a Central Bank Digital Currency (CBDC). The Prevention 
of Money Laundering Act (PMLA) now covers cryptocurrencies as well, forcing exchanges to report suspicious activity and carry out KYC processes. Discussions 
over striking a balance between innovation and regulation persist notwithstanding these initiatives. In light of the complicated regulatory landscape, the Securities 
and Exchange Board of India (SEBI) has proposed a multi-regulator architecture to regulate cryptocurrencies. In addition to promoting innovation and safeguarding 
investors, India's approach to cryptocurrency regulation must handle legal issues. The future of cryptocurrencies in India and their involvement in economic crimes 
will be shaped by ongoing attempts to create a strong regulatory framework.