India’s Financial Intelligence Unit (FIU-IND) has issued compliance notices to 15 cryptocurrency platforms over alleged failures to meet the country’s anti-money laundering requirements.
The notices, issued Tuesday under Section 13 of the Prevention of Money Laundering Act, target small and medium-sized virtual digital asset service providers. The platforms identified by FIU-IND include Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, FixedFloat, WhiteBIT and Guardarian.
India brought crypto exchanges and other virtual digital asset (VDA) service providers under its anti-money laundering framework in March 2023. The rules apply to platforms serving Indian customers even when they do not maintain an office or physical presence in the country.
Under the framework, such platforms must register with FIU-IND and comply with requirements covering customer verification, record keeping and the reporting of suspicious transactions to authorities.
Alongside the enforcement action, the financial intelligence agency warned the public about the potential dangers of crypto assets and non-fungible tokens (NFTs). FIU-IND said these products remain unregulated and can carry substantial risks, while users may have limited regulatory protection if they suffer losses.
The latest notices follow a report by The Economic Times highlighting how some Indian users are reportedly moving stablecoins such as USDT to crypto platforms in Sweden, Germany and Singapore. Those assets are allegedly converted into gift cards that can subsequently be used in India to pay for goods including groceries, fuel and gold.
The arrangement potentially allows funds to bypass Indian cryptocurrency exchanges and remain outside the direct monitoring of domestic authorities.
FIU-IND previously intensified its scrutiny of offshore crypto exchanges in December 2023, when it targeted nine major platforms, including Binance, Kraken and KuCoin. The agency issued show-cause notices over alleged non-compliance and asked India’s IT ministry to block their website URLs because of their operations in the country.
Binance subsequently registered with FIU-IND and was hit with a record INR 18.82 crore penalty for anti-money laundering violations, underscoring the regulator’s growing focus on offshore crypto platforms serving Indian customers.
