The Financial Intelligence Unit (FIU) of India said that nine cryptocurrency exchanges with offshore licenses are operating in the country without legal grounds.
The FIU released a document detailing the exchanges' violations of the PMLA Act and warned that appropriate action could be taken against Binance, KuCoin, and Huobi for operating illegally in India. Initially, the regulator called for the URLs of these exchanges to be blocked, focusing on registration and obligations under the PMLA 2002.
"Several offshore entities, though catering to a significant portion of Indian users, have not been registered and are not covered under the anti-money laundering (AML) and countering the financing of terrorism (CFT) framework. Under Section 13 of the Prevention of Money Laundering Act (PMLA), the Financial Intelligence Unit of India (FIU IND) has issued warnings to nine offshore companies offering digital asset services," the regulator said in a statement.
According to BeInCrypto, India has become the second-largest market in the world by transaction volume, after the U.S. The FIU IND said nine cryptocurrency exchanges, including Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, are operating illegally in India.
The FIU chief has asked the Ministry of Electronics and Information Technology to completely block the URLs of crypto exchanges that do not comply with the provisions of the PMLA Act.
The regulator points out that the activities of cryptocurrency exchanges are illegal and the companies do not meet India's registration requirements.
Meanwhile, the document stipulates that the exchanges must register with the FIU IND as a reporting entity. They will also have to comply with obligations under the Prevention of Money Laundering Act (PMLA) of 2002.
Digital service providers offering services in the country, whether located in India or elsewhere, are subject to regulatory requirements such as registering with the Financial Intelligence Unit as a reporting entity.
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