CRYPTOCURRENCY AND MONEY LAUNDERING IN INDIA: A STUDY UNDER THE PMLA 2002

AUTHOR – RUDRA VASHISHTH & NANCY SHARMA

STUDENTS AT QUANTUM UNIVERSITY

BEST CITATION – RUDRA VASHISHTH & NANCY SHARMA, CRYPTOCURRENCY AND MONEY LAUNDERING IN INDIA: A STUDY UNDER THE PMLA 2002, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (8) OF 2026, PG. 761-773, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

Cryptocurrencies establish a new financial system which utilizes decentralized blockchain technology for direct peer-to-peer transactions without any need for central banks or financial institutions to act as intermediaries. The increasing use of virtual digital assets in India creates new economic possibilities but also raises regulatory challenges. Their features which include pseudonymity and cross-border transferability and weak regulatory control make them highly suitable for criminals who intend to use these technologies for money laundering activities. The laundering of criminal proceeds stands as the primary target of the Prevention of Money- Laundering Act, 2002 (PMLA) which functions as the main law enforcement tool against this crime. India now shows progress in meeting global anti-money laundering requirements through its new regulations which extend reporting requirements to virtual asset service providers. This research investigates the methods by which criminals use cryptocurrencies to process illegal funds and assesses the PMLA’s capacity to counter this risk while assessing enforcement practices and court decisions. The research identifies existing regulatory weaknesses and presents recommendations to improve institutional capacity for Cryptocurrency and Money Laundering in India through PMLA 2002which will increase institutional transparency while maintaining financial security through innovative solutions. The PMLA established basic legal foundations which require a specialized and technology-based regulatory framework to tackle new types of digital financial crime.

Keywords: Cryptocurrency, Money Laundering, PMLA 2002, Virtual Digital Assets, Blockchain, Enforcement Directorate, Financial Intelligence Unit, AML Compliance.