The origin of financial crimes can be found somewhere around 300 B.C. between Greek merchants and insurance providers. Since then it has evolved adjacently to the advancements of financial structures and models in which money is subjected and transacted in.
And now with digital assets under the ambit, the act of committing money laundering, terror-financing and more hindered operations have amplified to even greater heights.
The Discovery of how crypto assets can be utilized for suspicious activities made it evident that regulations need to come into place in order to revamp their direct use in a fraudulent manner and illicit finance operations.
Undertaking the stance of promoting the adoption of crypto, safeguarding consumer rights and stabilizing financial systems, governments have started incorporating protection acts to encompass crypto assets, trading platforms, and custody providers to amend the practical usage of cryptocurrencies, in any form or version.
Primary Structure of PMLA Guideline in India
Contrary to the belief that centralized systems are continuously under the radar of authorities, defaulters have managed to slide through and make happen illegal-solicited transactions pertaining to the length of international money laundering, terror financing and more such activities.
To stop this transfer of value and blatant disregard towards the national economy, the Prevention of Money Laundering Act was set up in India in 2002 to enact the growing misuse of our financial models. In a nutshell, PMLA outlines the offense of money laundering and puts in an obligation for all the systems from where transactions are processed (banks for example), financial institutions and intermediaries who either monitor or verify or maintain records of sender identity information in case they need to be traced down.
Just like the financial institutions in Web2 comes under the regulation of PMLA guidelines, the finance ministry of India has now asked all the digital asset provider like crypto exchanges, trading platforms, wallet providers, custodians to adhere to the PMLA guidelines. Also, the safekeeping and administration aspect of digital assets is to be altered with a strict watch by the service providers to keep a track on bad actors and curb them from using platforms signed or operating under the jurisdiction of India.
Liminal Spearheading PMLA Integration Across Its Wallet and Custody Infrastructure
As far we have come into the journey of asset security, management and custody, the grey area that lies between trying to be compliant and safe isn’t easy to match.
Liminal is bridging this gap by mending the way wallet and custody providers are by encompassing the most significant and latest compliance issuance from the government bodies to keep the operations functioning for its clients and partners.
In accordance with the PMLA guidelines, all enterprises looking to operate with digital assets are mandated to comply with key pillars of anti-money laundering and counter-terrorist financing, such as Travel Rules, Transaction Monitoring, Suspicious Transaction Reporting and Record Keeping.
To carry out complete adherence to the aforementioned PMLA guidelines and to support the institutions operating in India, Liminal has updated its platform, to make every transaction that’s being processed through Liminal’s wallet complaint to the PMLA guidelines and secure.
This new update now simply allows any web3 business/project or exchange onboarding Liminal to be covered and compliant with the PMLA guidelines including all the crucial plug-ins like:
a) Travel Rule – Liminal has collaborated with Notabene and CODE, to ensure that all transactions processed comply with the Travel Rule requirements
b) Transaction Monitoring – We have integrated TRM and Elliptic to continuously track all the transactions and monitor them for suspicious activities
c) Record Keeping – Liminal will record and store all the transaction information for a prescribed period as per guidelines to help teams retrieve any information upon request
d) Reporting – Reports can be generated in the prescribed formats to allow submission directly from Liminal’s platform
Factoring in all our vision to become one of the biggest custodians, it is crucial we bring large coverage of designed wallet solutions in cohesion with compliance structures like PMLA. To empower our clients and allow them greater prowess to focus on building sustainable protocol is what we progressing towards building a layer of safe practices incomparable to anyone else.