FIU-India Issues Notices to 25 Offshore Crypto Exchanges for AML Norm Violations
New Delhi: The Financial Intelligence Unit-India (FIU-IND), operating under the Finance Ministry, has issued notices to 25 offshore virtual digital asset providers for non-compliance with the Prevention of Money Laundering Act (PMLA) norms. Among these entities are prominent platforms like British Virgin Islands-based LBank and BingX, both ranked among the top 20 crypto exchanges worldwide.
Alongside the notices, the government has instructed these providers to remove their applications and websites from public access in India, according to an official statement released on Wednesday.
Earlier in 2023, the government expanded the ambit of its anti-money laundering laws to include virtual digital asset providers. The Finance Ministry emphasized, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss resulting from such transactions.”
So far, 50 virtual digital asset service providers (VDA SPs) have registered with FIU-IND. However, the ministry noted that some entities catering to Indian users remain unregistered and thus operate outside the anti-money laundering (AML) and combating the financing of terrorism (CFT) framework.
Any VDA SP operating in India—whether offshore or onshore—and involved in activities such as exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping, or administration of these assets or instruments enabling control over them, must register with FIU-IND as a Reporting Entity.
These providers are required to comply with obligations mandated under the PMLA 2002, which include reporting, record-keeping, and other regulatory duties. Notably, these obligations are activity-based and do not depend on the physical presence of the entity in India.
The Finance Ministry reiterated that the regulatory framework aims to bring transparency and curb illicit activities in the virtual digital assets space, safeguarding Indian users and the financial system.
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