India’s Financial Intelligence Unit (FIU-IND) has issued notices to 15 cryptocurrency platforms for allegedly failing to comply with the country’s anti-money laundering rules.
The notices were issued Tuesday under Section 13 of the Prevention of Money Laundering Act and target small and medium-sized virtual digital asset service providers. The companies named by the agency are Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, FixedFloat, WhiteBIT and Guardarian.
Crypto exchanges and other virtual digital asset (VDA) service providers have been subject to India’s anti-money laundering framework since March 2023. The requirements apply to platforms serving Indian customers regardless of whether they have an office or other physical presence in India.
Platforms operating under the framework are required to register with FIU-IND, maintain appropriate customer and transaction records, verify users and notify authorities about suspicious activity.
The agency also cautioned the public about the risks of cryptocurrencies and non-fungible tokens (NFTs). FIU-IND said these products are unregulated and can expose users to significant risks, with limited regulatory protection potentially available for losses resulting from such transactions.
The enforcement action comes shortly after The Economic Times reported that some Indian crypto users are sending stablecoins such as USDT to platforms based in Sweden, Germany and Singapore. These platforms reportedly convert the digital assets into gift cards, which are then used in India to buy products including groceries, fuel and gold.
Such transactions could provide a way to keep funds away from Indian exchanges and outside the direct monitoring of local authorities.
FIU-IND had already stepped up its scrutiny of offshore exchanges in December 2023, when it targeted nine major platforms, including Binance, Kraken and KuCoin. The agency issued compliance show-cause notices and asked the IT ministry to block their URLs over alleged illegal operations in India, according to the Press Information Bureau.
Binance later registered with FIU-IND and paid INR 18.82 crore for anti-money laundering violations. The penalty was described as a record fine, highlighting the increasing regulatory pressure on offshore crypto platforms serving the Indian market.
