- India’s Financial Intelligence Unit issues compliance notices to Binance and eight other crypto exchanges.
- India’s stringent crypto regulations challenge the operation of offshore Virtual Digital Assets Service Providers.
In a significant development in the cryptocurrency regulatory landscape, India’s Financial Intelligence Unit (FIU IND) has taken a decisive step against non-compliant crypto exchanges.
Casting a wide regulatory net, FIU IND has directed the Ministry of Electronics and Information Technology to block URLs of nine major crypto exchanges, including the world-renowned Binance, for failing to adhere to the country’s anti-money laundering norms. This action highlights the increasing scrutiny of virtual digital assets service providers (VDA SPs) on a global scale, particularly in markets with rapidly growing crypto adoption like India.
Compliance Show Cause Notices Issued
In an unprecedented move, the Financial Intelligence Unit India has issued compliance Show Cause Notices to nine offshore Virtual Digital Assets Service Providers, signaling a heightened level of regulatory oversight in the Indian cryptocurrency sector. This decision was prompted by these entities’ failure to comply with the provisions of the Prevention of Money Laundering Act (PMLA) in India.
As part of their mandate, FIU IND has communicated with the Ministry of Electronics and Information Technology to facilitate the blocking of the URLs of these entities, which are operating illegally without the necessary registrations and adherence to the PMLA.
Stringent Regulatory Framework
India’s approach to regulating cryptocurrencies has been notably rigorous. The enforcement actions by FIU IND against prominent exchanges like Binance, Kraken, and Bitfinex underline the government’s commitment to bringing crypto exchanges under the ambit of its anti-money laundering and counter-financing of terrorism framework.
Notably, under the PMLA, 2002, both domestic and foreign crypto exchanges are required to register