India’s parliamentary finance panel has raised concerns over bank account freezes linked to peer-to-peer cryptocurrency transactions. The issue could receive a formal review after a new Finance Committee is constituted in October.
The development comes as lawmakers complete a year-long study of virtual digital assets and their regulatory framework. The current Standing Committee on Finance concluded its latest evidence sessions on Sept. 16.
Potential October review
Chairman Bhartruhari Mahtab said concerns over account restrictions connected to P2P crypto activity were raised, although the issue did not form part of the day’s formal proceedings.
Mahtab indicated that the next Finance Committee could examine the matter after it is constituted in October. The comments provide a possible path for users and industry participants seeking greater clarity around banking restrictions tied to crypto transactions.
P2P trading allows users to buy or sell digital assets directly with other individuals. In India, such transactions can involve bank transfers between counterparties. However, payments associated with suspected fraud or money laundering can trigger investigations and account restrictions.
The Enforcement Directorate has previously documented cases in which criminal proceeds moved through bank accounts before being converted into cryptocurrency through P2P channels. Such cases have added scrutiny around payment flows involving digital assets.
Crypto regulation remains unresolved
The Standing Committee’s broader VDA study has examined regulation, taxation, compliance and risks associated with cryptocurrencies. Parliamentary records show that the committee has held multiple sessions with financial authorities and industry participants.
India currently taxes certain virtual digital asset gains at 30%, while specified crypto transfers are subject to a 1% tax deducted at source. VDA service providers must also meet registration requirements with the Financial Intelligence Unit-India under anti-money-laundering rules.
The committee is now awaiting the government’s response before completing its report. Mean while, the possible October review of P2P-related bank freezes could bring further attention to the practical difficulties faced by crypto users whose accounts become restricted following transactions.
