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 norms under the Prevention of Money Laundering Act (PMLA). Among these entities are British Virgin Islands-based platforms LBank and BingX, both of which rank among the top 20 crypto exchanges globally.
The government has directed these providers to remove their applications and websites from public access within India, according to a statement released by the Finance Ministry on Wednesday.
In 2023, the government expanded the scope of the anti-money laundering law to include virtual digital asset providers. The ministry emphasized that crypto products and NFTs remain unregulated and can carry significant risks. “There may be no regulatory recourse for any loss arising from such transactions,” the statement warned.
To date, 50 virtual digital asset service providers (VDA SPs) have registered with FIU-IND. However, entities catering to Indian users but failing to register remain outside the anti-money laundering (AML) and combating the financing of terrorism (CFT) framework. FIU-IND continuously identifies such entities.
Virtual digital asset service providers operating in India—whether offshore or onshore—and involved in activities such as the exchange between virtual digital assets and fiat currencies, transfer or safekeeping of virtual digital assets, or administration of instruments enabling control over these assets are mandated to register with FIU-IND as Reporting Entities. They must comply with obligations set under the Prevention of Money Laundering Act, 2002.
These obligations are activity-based and do not depend on the physical presence of the entity in India. The regulations impose reporting, record-keeping, and other compliance requirements on VDA SPs, including mandatory registration with FIU-IND under the PMLA framework.
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