Cryptocurrency and Money Laundering — Mains Questions

Critically analyze the challenges faced by Indian law enforcement agencies in investigating and prosecuting cryptocurrency-related money laundering cases. Suggest measures to strengthen the regulatory and enforcement framework.

Discuss how the inherent characteristics of blockchain technology both facilitate and hinder money laundering activities. In light of this paradox, evaluate India's current approach to regulating Virtual Digital Assets (VDAs).

Examine the role of Central Bank Digital Currencies (CBDCs) in mitigating the risks of money laundering associated with private cryptocurrencies. What are the potential benefits and challenges for India in adopting a Digital Rupee from an internal security perspective?