- Financial Intelligence Unit identifies nine global crypto exchanges, including Binance and Kraken, operating unlawfully in India.
- These exchanges failed to comply with India's anti-money laundering and counter-terrorism financing framework.
- FIU requests the IT Ministry to block the websites of these exchanges to ensure compliance.
The Indian government agency, Financial Intelligence Unit, has stated that nine global crypto exchanges, such as Binance, Kraken, Kucoin, and Mexc, are operating unlawfully in the country. These exchanges must adhere to the local anti-money laundering act, prompting the agency to request that the IT Ministry block their websites.
In March this year, India included cryptocurrencies in its anti-money laundering and counter-financing of terrorism framework. According to FIU, 31 crypto firms have registered. To avoid taxes, several Indian traders have started using international cryptocurrency platforms. India imposed a 30% tax on cryptocurrency gains and a 1% deduction on each transaction last year.
Many Indian crypto exchanges like CoinSwitch Kuber, CoinDCX, and WazirX still enforce strict know-your-customer verifications for new users. However, this is different for several international platforms.
Sumit Gupta, co-founder and CEO of CoinDCX, stated that most Indian crypto exchanges are registered with FIU and comply with the Prevention of Money Laundering Act. He mentioned that FIU IND's recent directive towards offshore Virtual Digital Assets Service Providers (VDA SPs) will help reduce risks and establish a secure VDA ecosystem.
Last year, Binance founder Changpeng "CZ" Zhao informed TechCrunch that the company was not interested in expanding in India due to the lack of a crypto-friendly environment in the South Asian market.
Edited by Shruti Thapa