© Reuters.
NEW DELHI – India’s Financial Intelligence Unit (FIU) under the Ministry of Finance has taken enforcement action against nine offshore virtual digital asset (VDA) entities, including major cryptocurrency platforms such as Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfenex. The notices were issued based on Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA) for violation of Anti-Money Laundering and Anti-Terrorism Financing (AML) guidelines -CFT).
The FIU has identified non-compliance issues such as making undervalued transactions and maintaining insufficient documentation from countries including Seychelles, Cayman Islands and Switzerland. Additionally, the named entities neglected their reporting obligations to the Indian government, which affected a large number of Indian users. This follows the March 2023 mandate that brought virtual digital asset service providers (VDA SPs) within the scope of the anti-money laundering and counter-terrorist financing frameworks.
In response to these findings, the Ministry of Finance has asked the Ministry of Electronics and Information Technology to block URLs of non-compliant entities. These VDA entities provide services that facilitate exchanges between virtual assets and fiat currencies and are required to register with the FIU-IND as part of regulatory requirements to prevent money laundering activities. They are also required to file financial transaction declarations (SFT) with the tax service.
Although these regulations were put in place to combat money laundering and terrorist financing through digital asset transactions in India, only 31 of the many service providers operating in this area have met the legal requirements so far. ‘now. Today’s enforcement action is an important step in ensuring compliance with these regulations by all AVN entities operating in India.
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