AML-CFT in Action: How Regulations Impact Virtual Digital Asset Service Providers
Introduction
Significantly, in March 2023, the Prevention of Money Laundering Act, 2002's regulations placed Virtual Digital Asset Service Providers functioning located under the purview of the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) scheme. An important step toward controlling VDA SP operations and guaranteeing adherence to Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) regulations.
The significance of AML-CFT procedures
The AML-CFT framework's incorporation of Virtual Digital Asset Service Providers (VDA SPs) is essential for protecting the banking industry from illegal activities including the laundering of funds and counter-financing of terrorist attacks. These regulations become more crucial as the market for digital assets develops and becomes more well-known.
The practice of money laundering is hiding the source of the sum received illegally, thus it's critical to have strict policies in place to track down and stop these kinds of operations. Furthermore, funding for terrorism is a serious danger to international safety, hence stopping the flow of money to terrorist companies is a top concern for global officials.
The goal of policymakers' move to include VDA SPs in the AML-CFT architecture is to set up control and surveillance procedures that will guarantee these organisations' open and honest operations. This involves tracking transactions, flagging questionable activity, and conducting extensive customer investigations. Incorporating such procedures not only reduces the potential for financial crimes but also builds confidence and trust in the electronic asset market.
It is important to see the significance of AML-CFT procedures and the changes in the legal framework to reflect the evolving characteristics of digital currencies. These procedures are essential to preserving the reliability and safety of the wider banking system.
Notifications of Compliance Show Cause
Under Section 13 of the PMLA Act 2002, FIU IND sent adherence Show Cause Notices to nine offshore Virtual Digital Asset Service Providers (VDA SPs) as part of its dedication to upholding compliance with regulations. This affirmative step requires organisations to be scrutinised and attempted to bring them under inspection.
Governmental Response
The Director of FIU IND has addressed the Secretary of the Ministry of Electronics and Information Technology to take further measures due to the disregard of offshore firms. According to the notification, URLs connected to these organisations that operate in India in violation of the PML Act's requirements must be blocked.
Mandatory Registration for VDA SPs
Virtual Digital Asset Service Providers (both onshore and offshore) who perform a range of operations, including the trading of digital goods for monetary currencies, the distribution of digital currency, and the management or preservation of electronic assets, are now obliged to register with FIU.
Range of Statutory Responsibilities
In accordance with the PML Act, VDA SPs are subject to several requirements, including documentation, disclosure, and other duties. One of their responsibilities is to register with the FIU IND. The primary focus is on guaranteeing that VDA SPs comply with AML-CFT protocols, hence enhancing the general reliability of the banking industry.
Difficulties with Offshore Compliance
There are many obstacles in guaranteeing that offshore organisations comply with Anti Money Laundering/Counter Financing of Terrorism (AML-CFT), chief amongst them being their unwillingness to undergo registration. Some overseas Virtual Digital Asset Service Providers (VDA SPs) have been reluctant to comply with the existing rules and regulations, even though they cater to a significant number of Indian users. There are several reasons for this hesitation, such as worries about heightened monitoring, the expense of compliance, and the apparent complexity of governmental processes. Regulatory organisations have taken steps to close the discrepancy between offshore businesses' real activities and the regulations they must follow. In addition to maintaining the trustworthiness of the economic system, resolving the issues with offshore adherence is essential for promoting confidence and openness in the market for electronic assets.
Conclusion
FIU IND has demonstrated its dedication to creating an effective regulatory framework for Virtual Digital Asset Service Providers through its recent measures. India hopes to fortify its countermeasures against money laundering and safeguard the financial well-being of its users by expanding the AML-CFT legislation to offshore firms. The continuous efforts to restrict the URLs of non-compliant companies show a proactive approach to stopping illicit activity and fostering a safe and law-abiding virtual asset ecosystem. The safety and soundness of the banking sector will be crucially maintained by laws and regulations as the digital world develops.
References
- https://pib.gov.in/PressReleasePage.aspx?PRID=1991372
- https://www.thehindubusinessline.com/books/reviews/business-economy/fiu-ind-issues-compliance-showcause-notices-to-nine-offshore-vda-sps/article67684613.ece
- https://business.outlookindia.com/news/fiu-issues-notice-to-9-offshore-crypto-platforms-writes-to-meity-for-blocking-of-urls
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Introduction
India's Competition Commission of India (CCI) on 18th November 2024 imposed a ₹213 crore penalty on Meta for abusing its dominant position in internet-based messaging through WhatsApp and online display advertising. The CCI order is passed against abuse of dominance by the Meta and relates to WhatsApp’s 2021 Privacy Policy. The CCI considers Meta a dominant player in internet-based messaging through WhatsApp and also in online display advertising. WhatsApp's 2021 privacy policy update undermined users' ability to opt out of getting their data shared with the group's social media platform Facebook. The CCI directed WhatsApp not to share user data collected on its platform with other Meta companies or products for advertising purposes for five years.
CCI Contentions
The regulator contended that for purposes other than advertising, WhatsApp's policy should include a detailed explanation of the user data shared with other Meta group companies or products specifying the purpose. The regulator also stated that sharing user data collected on WhatsApp with other Meta companies or products for purposes other than providing WhatsApp services should not be a condition for users to access WhatsApp services in India. CCI order is significant as it upholds user consent as a key principle in the functioning of social media giants, similar to the measures taken by some other markets.
Meta’s Stance
WhatsApp parent company Meta has expressed its disagreement with the Competition Commission of India's(CCI) decision to impose a Rs 213 crore penalty on them over users' privacy concerns. Meta clarified that the 2021 update did not change the privacy of people's personal messages and was offered as a choice for users at the time. It also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update.
Meta clarified that the update was about introducing optional business features on WhatsApp and providing further transparency about how they collect data. The company stated that WhatsApp has been incredibly valuable to people and businesses, enabling organization's and government institutions to deliver citizen services through COVID and beyond and supporting small businesses, all of which further the Indian economy. Meta plans to find a path forward that allows them to continue providing the experiences that "people and businesses have come to expect" from them. The CCI issued cease-and-desist directions and directed Meta and WhatsApp to implement certain behavioral remedies within a defined timeline.
The competition watchdog noted that WhatsApp's 2021 policy update made it mandatory for users to accept the new terms, including data sharing with Meta, and removed the earlier option to opt-out, categorized as an "unfair condition" under the Competition Act. It was further noted that WhatsApp’s sharing of users’ business transaction information with Meta gave the group entities an unfair advantage over competing platforms.
CyberPeace Outlook
The 2021 policy update by WhatsApp mandated data sharing with Meta's other companies group, removing the opt-out option and compelling users to accept the terms to continue using the platform. This policy undermined user autonomy and was deemed as an abuse of Meta's dominant market position, violating Section 4(2)(a)(i) of the Competition Act, as noted by CCI.
The CCI’s ruling requires WhatsApp to offer all users in India, including those who had accepted the 2021 update, the ability to manage their data-sharing preferences through a clear and prominent opt-out option within the app. This decision underscores the importance of user choice, informed consent, and transparency in digital data policies.
By addressing the coercive nature of the policy, the CCI ruling establishes a significant legal precedent for safeguarding user privacy and promoting fair competition. It highlights the growing acknowledgement of privacy as a fundamental right and reinforces the accountability of tech giants to respect user autonomy and market fairness. The directive mandates that data sharing within the Meta ecosystem must be based on user consent, with the option to decline such sharing without losing access to essential services.
References
Executive Summary:
Old footage of Indian Cricketer Virat Kohli celebrating Ganesh Chaturthi in September 2023 was being promoted as footage of Virat Kohli at the Ram Mandir Inauguration. A video of cricketer Virat Kohli attending a Ganesh Chaturthi celebration last year has surfaced, with the false claim that it shows him at the Ram Mandir consecration ceremony in Ayodhya on January 22. The Hindi newspaper Dainik Bhaskar and Gujarati newspaper Divya Bhaskar also displayed the now-viral video in their respective editions on January 23, 2024, escalating the false claim. After thorough Investigation, it was found that the Video was old and it was Ganesh Chaturthi Festival where the cricketer attended.
Claims:
Many social media posts, including those from news outlets such as Dainik Bhaskar and Gujarati News Paper Divya Bhaskar, show him attending the Ram Mandir consecration ceremony in Ayodhya on January 22, where after investigation it was found that the Video was of Virat Kohli attending Ganesh Chaturthi in September, 2023.
The caption of Dainik Bhaskar E-Paper reads, “ क्रिकेटर विराट कोहली भी नजर आए ”
Fact Check:
CyberPeace Research Team did a reverse Image Search of the Video where several results with the Same Black outfit was shared earlier, from where a Bollywood Entertainment Instagram Profile named Bollywood Society shared the same Video in its Page, the caption reads, “Virat Kohli snapped for Ganapaati Darshan” the post was made on 20 September, 2023.
Taking an indication from this we did some keyword search with the Information we have, and it was found in an article by Free Press Journal, Summarizing the article we got to know that Virat Kohli paid a visit to the residence of Shiv Sena leader Rahul Kanal to seek the blessings of Lord Ganpati. The Viral Video and the claim made by the news outlet is false and Misleading.
Conclusion:
The recent Claim made by the Viral Videos and News Outlet is an Old Footage of Virat Kohli attending Ganesh Chaturthi the Video back to the year 2023 but not of the recent auspicious day of Ram Mandir Pran Pratishtha. To be noted that, we also confirmed that Virat Kohli hadn’t attended the Program; there was no confirmation that Virat Kohli attended on 22 January at Ayodhya. Hence, we found this claim to be fake.
- Claim: Virat Kohli attending the Ram Mandir consecration ceremony in Ayodhya on January 22
- Claimed on: Youtube, X
- Fact Check: Fake
Introduction
In the age of digital technology, the concept of net neutrality has become more crucial for preserving the equity and openness of the internet. Thanks to net neutrality, all internet traffic is treated equally, without difference or preferential treatment. Thanks to this concept, users can freely access and distribute content, which promotes innovation, competition, and the democratisation of knowledge. India has seen controversy over net neutrality, which has led to a legal battle to protect an open internet. In this blog post, we’ll look at the challenges of the law and the efforts made to safeguard net neutrality in India.
Background on Net Neutrality in India
Net neutrality became a hot topic in India after a major telecom service provider suggested charging various fees for accessing different parts of the internet. Internet users, activists, and organisations in favour of an open internet raised concern over this. Millions of comments were made on the consultation document by the Telecom Regulatory Authority of India (TRAI) published in 2015, highlighting the significance of net neutrality for the country’s internet users.
Legal Battle and Regulatory Interventions
The battle for net neutrality in India acquired notoriety when TRAI released the “Prohibition of Discriminatory Tariffs for Data Services Regulations” in 2016. These laws, often known as the “Free Basics” prohibition, were created to put an end to the usage of zero-rating platforms, which exempt specific websites or services from data expenses. The regulations ensured that all data on the internet would be handled uniformly, regardless of where it originated.
But the legal conflict didn’t end there. The telecom industry challenged TRAI’s regulations, resulting in a flurry of legal conflicts in numerous courts around the country. The Telecom Regulatory Authority of India Act and its provisions of it that control TRAI’s ability to regulate internet services were at the heart of the legal dispute.
The Indian judicial system greatly helped the protection of net neutrality. The importance of non-discriminatory internet access was highlighted in 2018 when the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) upheld the TRAI regulations and ruled in favour of net neutrality. The TDSAT ruling created a crucial precedent for net neutrality in India. In 2019, after several rounds of litigation, the Supreme Court of India backed the principles of net neutrality, declaring that it is a fundamental idea that must be protected. The nation’s legislative framework for preserving a free and open internet was bolstered by the ruling by the top court.
Ongoing Challenges and the Way Forward
Even though India has made great strides towards upholding net neutrality, challenges persist. Because of the rapid advancement of technology and the emergence of new services and platforms, net neutrality must always be safeguarded. Some practices, such as “zero-rating” schemes and service-specific data plans, continue to raise questions about potential violations of net neutrality principles. Regulatory efforts must be proactive and under constant watch to allay these worries. The regulatory organisation, TRAI, is responsible for monitoring for and responding to breaches of the net neutrality principles. It’s crucial to strike a balance between promoting innovation and competition and maintaining a free and open internet.
Additionally, public awareness and education on the issue are crucial for the continuation of net neutrality. By informing users of their rights and promoting involvement in the conversation, a more inclusive and democratic decision-making process is assured. Civil society organisations and advocacy groups may successfully educate the public about net neutrality and gain their support.
Conclusion
The legal battle for net neutrality in India has been a significant turning point in the campaign to preserve an open and neutral internet. A robust framework for net neutrality in the country has been established thanks to legislative initiatives and judicial decisions. However, due to ongoing challenges and the dynamic nature of technology, maintaining net neutrality calls for vigilant oversight and strong actions. An open and impartial internet is crucial for fostering innovation, increasing free speech, and providing equal access to information. India’s attempts to uphold net neutrality should motivate other nations dealing with similar issues. All parties, including politicians, must work together to protect the principles of net neutrality and ensure that the Internet is accessible to everyone.
