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India’s FIU Targets Binance and Others

The Indian Financial Intelligence Unit plans to prosecute nine international virtual asset service providers for allegedly violating anti-money laundering laws. The most prominent global exchanges hit by this were Bitfinex, Binance, Huobi, Bitstamp, KuCoin,, Bittrex, Kraken, and MEXC Global.

The Ministry of Electronics and Information Technology has urged these firms to shut down their website access to Indians after the unit sent compliance letters accusing them of indulging in illicit activities. Although thirty-one digital asset service providers have recently registered with the FIU IND, many offshore enterprises catering to Indian consumers still haven’t complied with AML and CFT laws.

Consequently, the FIU IND took drastic measures to achieve stricter control and supervision.

Complying With Several Regulatory Requirements

Whether based in India or elsewhere, providers of digital assets must adhere to several regulatory requirements. In India, they must register as a “Reporting Entity” with the Financial Intelligence Unit by the Prevention of Money Laundering Act (PMLA) 2002.

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The purpose of this law is to prevent exchanges from enabling money laundering. One of their duties is ensuring all new clients adhere to stringent Know Your Customer (KYC) regulations.

Recent data from the on-chain analytics platform Chainalysis shows that India ranks highest among the worldwide Bitcoin adoption index in 2022. This growth propelled India to the second-biggest market in anticipated transaction volume, just behind the United States of America.

The PMLA framework requires registration and the continuous implementation of anti-money laundering protocols. Also, it involves the comprehensive authentication of client identities and monitoring transactions to prevent any potentially illegal behavior within the digital asset ecosystem.

India’s Crypto Adoption Growth

According to the Financial Intelligence Unit, the crypto economy in India is growing rapidly, so there must be deployment and implementation of appropriate regulations. In response to suggestions made by the Financial Stability Board and the International Monetary Fund, the administration is making significant progress toward creating a comprehensive regulatory framework dedicated to Bitcoin and the broader crypto market.

This next framework, scheduled to be disclosed in 2024, will be for implementing the proposed regulations. One of these proposals is the mandatory deployment of proof-of-reserve audits in real time.

One other step is the implementation of tough, know-your-customer policies that are specifically designed for crypto companies. Regarding uniformity in tax policies, the framework suggests implementing what’s accepted globally.

In addition, the regulations imposed by the Reserve Bank of India intend to categorize crypto exchanges closely with licensed financial services providers. Despite the central government’s numerous regulatory changes, the cryptocurrency adoption rate in India continues to rise at a fast pace.

According to the October 2023 Global Crypto Adoption Index, India saw an influx of $250 billion worth of Bitcoin between July 2022 and June 2023. The United States received $1 trillion during the same period, placing India second.

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George Ward

By George Ward

George Ward is a crypto journalist and market analyst at Herald Sheets, known for his engaging articles on the latest digital currency trends. With a background in finance and journalism, he presents complex topics accessibly. George holds a degree in Business and Finance from the University of Cambridge.

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