Binance, Kucoin, Huobi, Kraken, Gate, Bittrex, Bitstamp, MEXC, and Bitfinex are among nine prominent crypto exchanges that have received a warning from Indian regulatory authorities.
The Financial Intelligence Unit India (FIU IND) has expressed concern about the failure of these exchanges to comply with registration regulations and regional legal requirements.
The FIU IND, which is in charge of monitoring virtual digital asset activities, has issued compliance Show Cause Notices to nine overseas Virtual Digital Asset Service Providers (VDA SPs).
The notices emphasize potential liability for the exchanges’ noncompliance with the Prevention of Money Laundering Act (PMLA) and the Anti-Money Laundering/Counter Financing of Terrorism (AML-CFT) framework.
Authorities discovered the cryptocurrency exchanges’ violation of the Prevention of Money Laundering Act (PMLA) Act, 2002 in March 2023. The following AML-CFT framework aims to ensure compliance with regional legislation.
Despite the absence of a physical presence in India, crypto exchanges are expected to comply with the AML-CFT framework based on their activity.
The FIU IND emphasizes that activities such as converting virtual digital assets to fiat currencies and transferring virtual digital assets, regardless of physical location, require regulatory adherence.
In response to the noncompliance, the director of FIU IND has requested that the URLs of the listed cryptocurrency exchanges be blocked by the Secretary of the Ministry of Electronics and Information Technology.
For crypto exchanges seeking to provide digital asset services in India, compliance with registration requirements is critical.
Despite the fact that 31 Virtual Digital Asset service providers have chosen to register with FIU IND, the statement notes that several offshore firms serving a significant number of Indian consumers have been evading registration requirements. To operate effectively in the Indian market, cryptocurrency exchanges must register with regulatory authorities.
