India's Financial Intelligence Unit Targets 9 Offshore Crypto Exchanges for Regulatory Non-compliance

By: Eva Baxter

In a significant move toward increased regulation of cryptocurrencies, India's Financial Intelligence Unit (FIU) has issued Show Cause Notices to nine offshore Virtual Assets Service Providers (VASPs), including Binance, KuCoin, and Huobi. As per the announcement on Dec. 28, this action marks India's rigorous enforcement effort regarding Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws within the digital asset sector.

This major regulatory move comes on the heels of VASPs coming under the AML-CFT framework since March 2023 and targets global entities operating without registration and compliance with the Prevention of Money Laundering Act (PMLA) involving Indian users. The organizations span diverse jurisdictions such as Seychelles, Singapore, the British Virgin Islands, the United States, Luxembourg, and the Cayman Islands.

Furthermore, to reinforce this enforcement, the Director of FIU IND has invoked the blocking of URLs being operated without adherence to Indian laws. This action is in sync with the Indian government's commitment of all VASPs, irrespective of their physical location, adhering to local laws while serving Indian users. Presently, 31 VASPs have registered successfully with the FIU and are fully compliant with the AML and CFT framework, and the action against these nine entities emphasizes India's serious intent in enforcing financial regulations.