Depends on what they classify it as. The preview of the bill said "private coins" would be prohibited. On what grounds, they did not say.

There was a call to treat NFTs as securities. If something like that is done, then any illicit trade of securities would be considered illegal, if not money laundering.

Only money acquired through illegal means can be considered laundered.

If transacting in certain cryptocurrencies is prohibited, then any money traded for these cryptocurrencies is quite literally acquired through illegal means.

If the money was earned from legal activity, I don't think a conversion to crypto is technically money laundering either.

Perhaps the profit from holding cryptocurrencies could be considered laundered once converted back to INR since the profit itself was illegally earned.