May 29, 2024
India Cracks Down on Global Crypto Giants
Latest Cryptocurrency News

Financial Intelligence Unit Targets Major Crypto Exchanges in India

India’s Financial Intelligence Unit sent notices to nine foreign virtual digital asset service providers, accusing them of illegal operations and violating anti-money laundering regulations. The providers include major global exchanges like Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.

As per a press release on Dec. 28, the unit urged the Ministry of Electronics and Information Technology to block these companies’ URLs, aiming to restrict access to their websites within the country.

The document highlighted that while 31 VDA SPs had registered with FIU IND, several offshore entities serving a significant portion of Indian users had evaded registration, falling outside the Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) frameworks. Digital asset providers, whether domestic or offshore, must adhere to specific regulatory prerequisites, including registration with the Financial Intelligence Unit as a ‘reporting entity.’ Post-registration, they are bound by regulations specified in the Prevention of Money Laundering Act (PMLA) 2002, mandating measures to deter money laundering activities, including Know Your Customer (KYC) protocols for client onboarding.

India’s ascendancy in Chainalysis’ 2022 global crypto adoption index, ranking as the foremost country by raw estimated transaction volume worldwide after the United States, has drawn regulatory attention. To address this surge in crypto adoption, India is crafting a regulatory framework aligned with joint recommendations from the International Monetary Fund and the Financial Stability Board.

Expected for release in 2024, the framework is likely to introduce stringent KYC guidelines for crypto entities, necessitate real-time proof-of-reserve audits, propose a standardized tax policy across nations, and bring crypto exchanges under a status akin to authorized dealers, aligning them with the guidelines set by the Reserve Bank of India, similar to banks.

Image by freepik

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