The Financial Intelligence Unit (FIU) has issued non-compliance notices to 15 crypto platforms, or what it calls Virtual Digital Asset Service Providers (VDA SPs), under the Prevention of Money Laundering Act (PMLA).
The notified entities could face access blocks in the country, with the FIU directing them to take down their applications and URLs.
India’s FIU Cracks Down On Crypto Entities
According to the Financial Intelligence Unit, the platforms failed to comply with several provisions of the PMLA and were operating illegally in the country. The platforms included in the list are Weex, Blofin, Bitunix, DigiFinex, Toobit, Razorex, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, FixedFloat, WhiteBIT, and Guardarian.
India expanded its anti-money laundering and counter-financing of terrorism framework in 2023, bringing VDA service providers in India under the ambit of FIU registration and PMLA obligations.
The PMLA mandates that companies registered as reporting entities with the Financial Intelligence Unit must report transactions and keep detailed records. These requirements are not contingent on whether the platform has a physical presence in the country. The agency stated in its press release,
“These obligations are activity-based, and are not contingent on the physical presence of the entity in India. The regulation casts reporting, record-keeping, and other obligations on the VDA SPs under the PMLA Act, which also includes registration with the FIU-IND.”
Prior Notices
Several cryptocurrency platforms have previously restricted operations in India for failing to comply with regulatory requirements. Bybit operations in India were temporarily restricted in January 2025. Access to Bybit services was fully restored once the platform completed its FIU registration. Coinbase, which suspended operations after failing to comply with regulatory requirements, returned to the Indian market after registering with the FIU, and Binance returned in 2024 after paying a $2.25 million penalty.
Investor Impact
The FIU and Ministry of Finance also cautioned against NFTs and other crypto products, stating they remain unregulated and carry substantial risk.
“There may be no regulatory recourse for any loss from such transactions.”
India’s Financial Intelligence Unit is responsible for monitoring suspicious financial transactions and reporting them to relevant agencies. Ankit Ghosh, Partner at King Stubb & Kasiva, Advocates and Attorneys, explained how crypto entities fell under the FIU, stating,
“FIU-IND has always looked at the activity rather than the place of incorporation, so an offshore exchange serving Indian users comes within the reporting framework wherever it is based. Alongside the Section-13 notice, FIU-IND directed that the apps and URLs be removed under Section 79(3)(b) of the IT Act, and that directly affects user access.”
Cryptocurrency platform WazirX called the FIU’s compliance requirements critical for protecting users, stating,
“FIU-IND’s compliance standards are critical to protecting users and preventing the misuse of VDA platforms and illegal fund transfers. Measures like KYC, AML, geotagging, and liveness verification have made India’s VDA system safer over the years, and the same rules must apply to every platform serving Indian users, whether it operates from India or overseas.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
https://www.cryptobreaking.com/indias-financial-intelligence-unit-issues/?utm_source=blogger%20&utm_medium=social_auto&utm_campaign=India’s%20Financial%20Intelligence%20Unit%20Issues%20Non-Compliance%20Notices%20To%2015%20Crypto%20Platforms%20
Comments
Post a Comment