Jai Sahu
The Financial Intelligence Unit, a government agency in India responsible for scrutinizing financial transactions, made an announcement on Thursday that it considers nine global cryptocurrency exchanges, including notable names like Binance, Bitstamp, Kraken, Kucoin, Gate.io, and Mexc, to be operating in violation of the country’s anti-money laundering regulations, characterizing their operations as “illegal.”
As a response to this determination, the Financial Intelligence Unit has formally requested the Ministry of Information Technology to intervene and block access to these exchanges’ websites.
In an effort to enforce compliance among these offshore entities, the Financial Intelligence Unit India (FIU IND) has issued Show Cause Notices for compliance to nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA). The list of exchanges includes Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, Mexc Global, and Bitfinex.
The Director of FIU IND has communicated with the Secretary of the Ministry of Electronics and Information Technology, urging the blocking of the URLs of these entities that are allegedly operating in violation of the provisions of the PML Act within India.
Virtual Digital Asset Service Providers (VDA SPs), whether operating within India or offshore, engaged in activities such as the exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets, or facilitating control over virtual digital assets, are mandated to register with FIU IND as Reporting Entities. They are obligated to adhere to a specific set of obligations as outlined in the Prevention of Money Laundering Act (PMLA) 2002.
It is important to note that these obligations are based on the activities conducted by VDA SPs and are not contingent upon their physical presence within India. The regulations place responsibilities such as reporting, record-keeping, and other obligations on VDA SPs under the PML Act, including registration with FIU IND.
According to a statement, to date, 31 VDA SPs have registered with FIU IND. However, several offshore entities, despite serving a substantial portion of Indian users, have failed to register and comply with the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework as required by law.