Indian Authorities Issue Notice to Global Crypto Exchanges Over Violations

• Nine overseas VDA SPs were sent compliance Show Cause Notices by FIU IND.
• The agency’s director has requested to block the URL of cryptocurrency exchanges listed.

For failing to comply with registration regulations, Indian authorities have issued a warning to nine cryptocurrency exchanges: Binance, Kucoin, Huobi, Kraken, Gate, Bittrex, Bitstamp, MEXC, and Bitfinex.

A statement from the Financial Intelligence Unit India (FIU IND) states that nine overseas VDA SPs were sent compliance Show Cause Notices. To be more specific, the crypto exchanges might be held accountable for their failure to comply with regionally applicable federal legislation as a result of this notification.

Following their discovery of their violation of the Prevention of Money Laundering Act (PML) Act, 2002 in March 2023, the crypto exchanges were subjected to the Anti-Money Laundering/Counter Financing of Terrorism (AML-CFT) framework.

Request for Blocking URL

According to the announcement, the FIU IND is responsible for monitoring activities such as the conversion of virtual digital assets to fiat currencies, transferring virtual digital assets, and keeping or administering virtual digital assets or instruments that allow control over virtual digital assets.

The fact that the cryptocurrency exchange does not have a physical presence in the nation is irrelevant to the fact that it must adhere to this framework/obligation, since it is activity-based.

For this reason, the agency’s director has requested that the Secretary of the Ministry of Electronics and Information Technology block the URL of cryptocurrency exchanges listed. Like other cryptocurrency exchanges that want to provide digital asset services in India, they need to register with the FIU IND before they can operate effectively in the country.

So far, 31 VDA service providers have chosen to register with FIU IND. The statement did note that while serving a large number of Indian consumers, a number of offshore firms were evading registration requirements.

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