India’s Financial Intelligence Unit (FIU) has taken strict action against nine offshore Virtual Assets Service Providers (VASPs) for non-compliance with India’s Anti-Money Laundering and Anti-Finance of Terrorism (AML-CFT) laws, according to a announcement of December 28. .
These entities, including major players like Binance, KuCoin and Huobi, have received Show Cause Notices under the Prevention of Money Laundering Act (PMLA), marking a significant escalation in India’s enforcement of financial regulations in the digital asset space.
Unregistered actions
The move comes after the inclusion of VASPs in the AML-CFT framework in March 2023, highlighting India’s commitment to regulate the fast-evolving virtual assets sector.
The FIU’s action targets entities operating without registration and compliance with the PMLA, necessitating a response to explain their activities in relation to Indian users.
The list of entities that have issued notices includes renowned global companies such as Binance with multiple global addresses, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.
These organizations, hailing from various jurisdictions such as Seychelles, Singapore, British Virgin Islands, United States, Luxembourg and Cayman Islands, are now under scrutiny for their activities involving Indian users.
To further tighten regulations, the Director of FIU IND has requested the Ministry of Electronics and Information Technology to block the URLs of these entities, citing their illegal activities without compliance with Indian laws.
31 registered entities
This move is part of a broader effort to protect the Indian financial system from unregulated risks in virtual asset transactions.
These developments underscore the Indian government’s stance to ensure that all VASPs, regardless of their physical presence, adhere to local laws when targeting Indian users.
Currently, 31 VASPs have successfully registered with the FIU and are fully compliant with the AML and CFT framework. The action against the nine offshore entities sends a clear message about India’s intention to rigorously enforce its financial regulations, especially in the context of the growing prominence of virtual assets.
Compliance requirements extend beyond registration to include strict reporting, record keeping and PMLA compliance.