The Indian Financial Information Unit (FIU-IND) has issued a notice to 25 offshore cryptocurrency exchanges for not complying with the Money Laundering Anti-Money Laundering (AML) rules.
Offshore platforms face market block
Flagged exchanges include Coinex, Bingx, Primexbt, Huione, Paxful, Cex.io, Bitmex, BitRue, and Cincola. According to the Ministry of Finance, URLs and mobile apps linked to these platforms could soon be disabled for Indian users.
The authorities stressed that compliance obligations under the PMLA are based on activities. This means that offshore platforms must register if they serve Indian customers, regardless of whether they have a local office or not.
AML Rules for Virtual Digital Asset Providers
The ministry has made it clear that Virtual Digital Asset Service Providers (VDA SPS) need to legally operate with FIU-IND. Registration requires reporting suspicious activity, maintaining transaction records, and sharing data when requested.
Related: India is pressing it to act on the Stubcoin Rules as it launches stripe tempo and supplies $240 billion.
So far, about 50 VDA SPS have been successfully registered with FIU-IND. However, recent notices show a second wave of enforcement, following similar actions almost two years ago against nine major offshore exchanges, including Binance, Kucoin, Okx and Bybit. The government’s sustained focus reflects its commitment to ensuring digital financial activities function within a regulated framework.
Government’s stance on cryptocurrency risks
While India continues to consider formal cryptocurrency regulations through its discussion paper, authorities continue to be cautious about the potential risks of unregulated digital assets. The Treasury emphasizes that cryptographic products and NFTs do not have investor regulatory protection in the case of losses. Therefore, compliance with AML regulations is not only a legal requirement, but also a safeguard for market integrity.
Related: India’s central bank supports the use of enterprise blockchain in supply chain finance
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