Cryptocurrency/Virtual Digital Asset Regulation and Exchange Security

Fiscal capture and anti-money-laundering surveillance sit on opposite sides of India's VDA framework, and both carry statutory teeth. Income Tax Act Section 115BBH imposes a 30% flat tax on Virtual Digital Asset gains; Section 194S mandates TDS on VDA transfers. Since March 2023, crypto exchanges must register as reporting entities under PMLA 2002, filing disclosures with FIU-IND. Security vulnerabilities specific to centralised exchanges include hot-wallet breaches, private-key theft, and smart-contract exploits. FIU-IND registration requirements imposed on intermediaries make surveillance structural, not discretionary.

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