India is advocating at the Financial Action Task Force (FATF) in Paris for online gaming companies to be included in the anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks.
The international watchdog on money laundering and terrorism financing is called FATF. It establishes global norms to stop these illicit acts and the damage they do to society.
The nation has previously implemented measures to combat illicit funding and has reached a high degree of technical compliance with the FATF Recommendations.
According to an ET article, the government has initiated internal deliberations and is investigating methods to impose more stringent know-your-customer (KYC) policies and require these businesses to disclose any questionable activity.
Authorities are anticipated to draw attention to the money laundering abuse of online gaming platforms such as Mahadev Apps. As part of an ongoing investigation into the "Fairplay" app, a Mahadev Betting app subsidiary that is allegedly engaged in illegal broadcasting of the Indian Premier League (IPL) and other betting activities, including the 2024 Lok Sabha election result, the Enforcement Directorate (ED) recently conducted searches at 19 locations in Mumbai and Pune.
To protect the industry from the risk of money laundering, the government is now developing a policy framework.
Since FATF, a global organisation, recognises the industry under the AML/CFT framework, the industry is expected to include strict KYC standards and procedures for reporting suspicious transactions.
Last year, the government brought specific activities related to virtual digital assets under the purview of the Prevention of Money Laundering Act, of 2002. It also has been made mandatory for foreign online gaming companies to register in India, but most are yet to comply.
