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India’s financial intelligence unit flags 15 crypto platforms for AML lapses
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- DeepHorus
India's Financial Intelligence Unit (FIU-IND) has escalated its regulatory crackdown on the cryptocurrency sector by issuing non-compliance notices to 15 offshore platforms. The action targets virtual digital asset service providers accused of serving Indian customers without proper registration under the nation's stringent anti-money laundering (AML) framework. This move underscores the government's commitment to enforcing its financial regulations across the borderless digital asset ecosystem.
The FIU-IND issued these notices under Section 13 of the Prevention of Money Laundering Act (PMLA), a regulatory power activated in March 2023. Under these rules, any crypto platform targeting Indian users must register with the FIU, regardless of its physical location. Registration mandates strict customer verification, record maintenance, and mandatory reporting of suspicious activities to authorities.
Named in the action are 15 small to medium-sized operators, including Weex, Blofin, XT.com, Latoken, WOO X, and WhiteBIT. These platforms now face compliance demands for allegedly operating outside the established legal framework. The notices signal that regulatory oversight is being applied uniformly, targeting entities of all scales.
The enforcement action comes amid rising concerns over specific transactional behaviors. Reports indicate some Indian users are using overseas platforms to convert stablecoins like USDT into gift cards. These cards are then utilized domestically to purchase essentials such as groceries, fuel, and gold, effectively bypassing local exchanges and regulatory scrutiny.
This is not India's first major intervention against unregistered crypto services. In December 2023, the FIU-IND issued similar notices to major exchanges including Binance, Kraken, and KuCoin, even requesting the IT ministry to block their URLs. Binance subsequently registered, paid a record penalty of INR 18.82 crore for AML violations, and became compliant.
Alongside the enforcement notice, the FIU issued a public advisory cautioning citizens about the inherent risks of crypto products and NFTs. It emphasized that these assets are unregulated and can be highly volatile, offering no regulatory recourse for potential losses. This dual approach combines enforcement with consumer protection efforts.
The latest crackdown reinforces India's position on bringing virtual asset service providers within its regulatory purview. By consistently acting against non-compliant offshore platforms, authorities aim to mitigate financial risks and combat illicit flows. Future compliance from the flagged entities will be a key indicator of the regulation's effectiveness.
The development highlights a growing global trend of jurisdictions extending AML rules to the crypto industry. India's proactive stance may serve as a precedent for other nations grappling with cross-border digital asset transactions. The focus now shifts to whether these 15 platforms will register or face further restrictions.
