The Centre has said provisions of money laundering will now also be imposed on cryptocurrencies or virtual assets, PTI reported on Wednesday.

In a notification issued on Tuesday, the finance ministry said that transactions involving the exchange, transfer and safekeeping of crypto assets will be covered under the Prevention of Money-laundering Act, or PMLA.

All crypto exchanges in India will now be required to report suspicious activities to the Financial Intelligence Unit, a unit of the Department of Revenue that collect financiall intelligence on offences related to PMLA.

The decision is also likely to help investigative agencies in taking action against companies involved in cryptocurrency trade, according to The Indian Express.

In August last year, the Enforcement Directorate had frozen bank assets worth Rs 64.67 crore of cryptocurrency exchange company WazirX. The agency had alleged that WazirX helped companies provide instant loans to launder fraudulently acquired money by allowing them to purchase and transfer crypto assets.

In February, Finance Minister Nirmala Sitharaman had told Parliament that India has been discussing a standard operating protocol for regulating crypto assets with member countries of the G-20, according to PTI.

She had said that crypto assets and web3 are relatively new and evolving sectors and required significant international collaboration for any legislation to be fully effective.

Web3 refers to an online ecosystem that removes the need for significant corporations and search engines like Google. It takes use of blockchain, a transaction-recording computer database that is stored in several different places at once.

Prior to this in March last year, the Indian government had said it has no plans to introduce cryptocurrencies. The Reserve Bank of India had also raised “serious concerns” around private cryptocurrencies, saying that these could cause financial instability.