CRYPTOCURRENCY AND MONEY LAUNDERING:RISKS AND REGULATORY CHALLENGES

Abstract

Cryptocurrencies have revolutionized digital finance, offering decentralization, anonymity, and cross-border transactions. However, these very attributes have also facilitated money laundering, posing significant challenges for regulators. This paper examines the risks associated with cryptocurrency in relation to money laundering, emphasizing India’s legal and regulatory framework. It discusses the role of the Prevention of Money Laundering Act (PMLA), the Reserve Bank of India (RBI) directives, and recent policy developments concerning digital assets. Additionally, the paper explores international regulatory frameworks and suggests policy measures to strengthen anti-money laundering (AML) mechanisms in India.