India’s financial watchdog, the Financial Intelligence Unit India (FIU-IND), has issued notices to 25 offshore crypto exchanges for failing to comply with the country’s anti-money laundering obligations. The crackdown targets platforms with billions of dollars in assets, including BingX, LBank, CoinW, ProBit Global, BTCC, AscendEX, Zoomex, CEX.IO, and Poloniex, among others. The regulator has ordered these platforms to withdraw their apps and websites from public access in India, although most remained accessible as of press time. The 25 affected exchanges collectively hold more than $9 billion in assets and recorded about $20 billion in trading volume over a recent 24-hour period, according to data from CoinMarketCap.
Compliance Failures and Responses
The action stems from a March 2023 notification by the Indian finance ministry that brought all virtual asset service providers under the Prevention of Money Laundering Act of 2002 (PMLA). This law made it mandatory for crypto exchanges serving Indian users, whether based locally or abroad, to register with the FIU-IND and comply with its reporting and record-keeping requirements.
Mark Taylor, head of financial crime at CEX.IO, said in a statement that the company is “in the research process and will definitely ask and explain our position to the regulator.” He noted that no immediate changes have been implemented on the platform for Indian users. Taylor added, “However, given the FIU order, we encourage customers to remain attentive to official communications from both regulators and CEX.IO regarding possible restrictions on access, local payment channels, or app availability.”
The Context of Mandatory Registration
The Indian finance ministry has stated that at least 50 crypto exchanges have so far registered with the anti-money laundering watchdog. The regulator has previously taken action against major platforms such as Binance, Coinbase, KuCoin, and OKX. While OKX exited the Indian market last year, Binance, Coinbase, and KuCoin registered with the FIU in recent months to resume operations. For example, Coinbase re-entered India earlier this year and launched an early-access program for Indian users. These regulatory moves aim to bring the entire Virtual Digital Asset (VDA) ecosystem into the country’s legal and financial oversight framework.
What The Author Thinks
This aggressive enforcement action by the FIU-IND is a crucial test of the Indian government’s regulatory authority over the crypto industry. By targeting massive offshore platforms, the government is sending a clear message that compliance with anti-money laundering laws is non-negotiable, regardless of a company’s physical location. This decisive move is aimed at protecting the Indian financial system from illicit activities and will likely accelerate the migration of users from unregistered to compliant platforms. The long-term consequence of this crackdown will be a more regulated, but ultimately more stable, crypto market in India, solidifying the government’s stance that financial innovation must not compromise national security.
Featured image credit: Ewan Kennedy via Unsplash
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