FIU IND blocks 9 crypto exchange URLs for non-compliance
A total of 9 crypto exchange platforms have been served with a compliance Show Cause notice by the Financial Intelligence Unit India, also recognized as FIU IND. The names of these platforms are Binance, Kucoin, Kraken, Huobi, Gate.io, Bitstamp, Bittrex, Bitfinex, and MEXC Global.
The said department has written to the Ministry of Electronics and Information Technology, asking them to block the URLs of the listed crypto exchange platforms. This would disable Indian residents’ access to those websites or applications. FIU IND’s move has been triggered by non-compliance with the PML Act, India.
Cryptocurrency exchanges, offshore and onshore, are required to register as part of the Prevention of Money Laundering Act. Compliance is based on activity, not on their physical presence in the country. Meaning if a platform is physically present outside India but holds its operations in the country, then it still has to register.
One condition is that the platform engages in activities including, but not limited to, exchange between fiat currencies and virtual digital assets. Other aspects include the safekeeping of digital assets, the transfer of virtual assets, and administering instruments that grant control over virtual digital assets. Not just AML, compliance spreads within the framework of CFT as well—counter-financing terrorism.
The press release, which is publicly available on the internet, highlights that 31 crypto exchange platforms have already registered with FIU IND. Offshore and onshore, Virtual Digital Assets Service Providers (VDA SPs) not registering with relevant departments in India now face a compliance Show Cause notice.
This is not the first time platforms have gone under the authorities’ radar for money laundering. Back in 2018, Binance faced federal investigations for money laundering. It was in November 2021 when the US Department of Justice announced criminal charges against the platform and its CEO, Changpeng Zhao. He later pleaded guilty and agreed to make settlements worth $4.3 billion.
Specifically in India, FIU IND previously tracked 3,300 crypto accounts for engaging in money laundering. The number dates back to early December 2022, with a possibility of an increase in the last 12 months. They were further recognized for drug trafficking and other illegal activities.
At that time, a request was sent to platforms to block those associated accounts. Now, platforms face charges of not complying with the law of the land.
Members of India’s crypto community have urged others not to panic because the notification simply demands exchange platforms to register with government organizations. URLs will only be blocked if they do not register and comply.
That is a far-fetched impossibility, considering crypto exchange platforms serve a substantial part of India, making up for a lot of business compared to their global presence. 9 crypto exchange platforms can present their case before agencies take a call to block their URLs. Registration with FIU IND is mostly how the matter is expected to conclude.
