The Financial Intelligence Unit (FIU), an entity under the Indian Finance Ministry, has initiated action against nine offshore crypto exchanges, sending them show-cause notices for suspected non-compliance with Indian anti-money laundering laws. Additionally, FIU has urged the Ministry of Electronics and Information Technology (MeitY) to block these exchanges' URLs within India. Allegedly, these exchanges, which include prominent names like Binance and Kucoin, are operating unlawfully in the country.
According to the notice released by FIU, these nine crypto exchanges have received compliance show cause notices under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA). The notices highlight the requirement for virtual digital asset service providers, irrespective of their location within or outside India, to engage in activities such as exchanges between virtual digital assets and fiat currency, asset transfers, safekeeping, or management of virtual digital assets, or enabling control over these assets, to register with FIU India as a 'Reporting Entity.' Compliance with the stipulated regulations outlined in the PMLA of 2002 is mandatory.
"The regulation imposes reporting, record-keeping, and various obligations on the Virtual Digital Asset Service Providers (VDA SPs) under the PML Act, which includes their registration with FIU India," the notice elaborates.
FIU's notice underscores that currently, 31 VDA SPs have completed registration with FIU India. Nevertheless, several offshore entities, despite catering to a substantial user base in India, have been evading registration, thereby operating beyond the scope of the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.
FIU India serves as the pivotal national agency responsible for receiving, processing, analyzing, and disseminating information related to suspicious financial transactions to enforcement agencies and foreign Financial Intelligence Units. This action is part of its broader mandate to ensure compliance with financial regulations and combat illicit financial activities.
Â
