Financial Intelligence Unit India (FIU IND) has issued compliance show cause notices to nine cryptocurrency platforms, including Binance, Kucoin, and Huobi, among others. These Virtual Digital Assets Service Providers (VDA SPs) are urged to comply with the provisions of the Prevention of Money Laundering Act (PML) Act.
As per the PML act, these VDA SPs operating in India (both offshore and onshore) and engaged in activities like the exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets, etc. are required to be registered with FIU IND as Reporting Entity and comply with the set of obligations.
The accused Offshore VDA Service Providers include Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and MEXC Global. As a part of their action, FIU IND has written to the Secretary of MeitY to block the URLs of the entities that are operating illegally without complying with regulations.
This move is intended to regulate activities such as virtual asset-fiat currency exchange, asset transfers, and safekeeping, aligning with the activity-based obligations outlined in the PML Act.
These listed service providers, despite serving a significant Indian user base, have been accused of operating without due registration and evading Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) frameworks.