The Financial Intelligence Unit of India has requested that the URLs of Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex be blocked.
Nine international virtual asset service providers received compliance notices from India’s Financial Intelligence Unit for allegedly engaging in illicit activities and breaking anti-money laundering laws.
Global cryptocurrency exchanges Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex are a few of the companies offering cryptocurrency services. The unit requested the Ministry of Electronics and Information Technology to block the companies’ URLs, presumably to stop people from accessing their websites within the nation, according to a press release dated December 28.
Thirty-one VDA SPs have registered with FIU IND thus far. Nevertheless, the document states that despite serving a sizable portion of Indian users, a number of offshore entities were failing to register and fall under the purview of the frameworks for counter-terrorist financing (CFT) and anti-money laundering (AML).
Digital asset providers operating in the country, whether based in India or abroad, must comply with specific regulatory requirements, such as registering with the Financial Intelligence Unit as a “Reporting Entity.” Once registered, they have to abide by the rules specified in the Prevention of Money Laundering Act (PMLA) 2002. This act imposes a number of obligations aimed at preventing money laundering, including Know Your Customer (KYC) guidelines for onboarding clients.
In Chainalysis’ global crypto adoption index for 2022, India was ranked first, becoming the world’s second-largest market by raw estimated transaction volume, trailing only the United States.
Growing crypto adoption has prompted India’s regulators to act. The country is developing a crypto regulatory framework based on the International Monetary Fund and the Financial Stability Board’s joint recommendations. The framework, which is expected to be released in 2024, will most likely include advanced KYC rules for crypto companies as well as a requirement for the release of real-time proof-of-reserve audits. It is also expected to propose a global tax policy and to grant crypto exchanges the same status as authorized dealers (similar to banks) under Reserve Bank of India guidelines.
