Business News Report
December 29, 2023

India’s Financial Intelligence Unit Issues Compliance Notices for Nine Crypto Exchanges

In Brief

FIU India issued compliance notices to 9 major cryptocurrency exchanges operating in the country, categorizing their operations as illegal.

India Financial Intelligence Unit Issues Compliance Notices for Nine Crypto Exchanges

The Financial Intelligence Unit India (FIU IND) issued compliance Show Cause Notices to major cryptocurrency exchanges including Binance, Kucoin, Gate, Huobi, Kraken, Bittrex, Bitstamp, MEXC and Bitfinex, operating in the country categorizing their operations as illegal.

FIU IND is urging the Ministry of Electronics and Information Technology (MEIT) to block the internet addresses of these nine exchanges due to their non-compliance with the provisions of the Prevention of Money Laundering (PML) Act and Counter Financing of Terrorism (CFT) framework in India.

The implementation of a shadow ban signifies a notable development in India’s regulatory stance on cryptocurrencies, creating operational challenges for exchanges operating in the country.

The FIU IND decision aligns with India’s emphasis on financial surveillance and adherence to anti-money laundering regulations. It underscores the authorities’ concerns regarding potential risks associated with cryptocurrency transactions and emphasizes the government’s commitment to addressing regulatory issues and establishing enhanced oversight within the cryptocurrency sector.

Current State of India’s Cryptocurrency Landscape

According to the 2023 Geography of Cryptocurrency report by Chainalysis, the Central and South Asian region (CSAO) constitutes approximately 20% of global cryptocurrency activities. Six countries within this region, namely India, Vietnam, the Philippines, Indonesia, Pakistan and Thailand, prominently figure in the Global Crypto Adoption Index.

The heightened focus of the Indian government on cryptocurrencies has led to new regulatory considerations.

Earlier this year, Indian Prime Minister Narendra Modi, recognized for his rigorous approach to cryptocurrencies, issued a call for the formulation of a universal regulatory framework for digital assets. This request was communicated through a Presidency Note, contributing to the formulation of a roadmap intended to establish a comprehensive global framework for crypto assets.

In a recent development, the Central Bank of India declined to endorse the legalization of cryptocurrencies, citing a perceived lack of economic “upside” in categorizing them as regulated financial instruments.

The FIU IND’s move against major cryptocurrency exchanges reflects India’s evolving concerns about cryptocurrencies, emphasizing the government’s commitment to enhancing oversight.

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About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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