India’s Crypto Regulatory Landscape: FIU-India to Grant More Offshore Exchanges Access
The Financial Intelligence Unit-India (FIU-India) is gearing up to grant clearance to two more offshore crypto exchanges to resume operations in India by March next year, following its approval of Binance and KuCoin.
FIU-India, responsible for anti-money laundering compliance, is currently reviewing applications from four crypto exchanges previously banned for non-compliance with India’s anti-money laundering laws.
FIU-India’s Scrutiny and Conditions
FIU-India is meticulously examining each exchange’s transaction visibility, suspicious transaction reporting (STR), and other related issues. The source also mentioned that necessary penalties will be imposed, akin to the actions taken against Binance and KuCoin.
“Only after complete due diligence will we allow any crypto exchange to operate in India. We are very strict about compliance,” an official stated.
Background and Recent Developments
In December 2023, FIU-India issued show cause notices to nine offshore cryptocurrency exchanges for their “illegal” operations within the country, prompting the blocking of their URLs in India.
However, Binance registered itself as a reporting entity with FIU-India in August 2024, following a show cause notice for non-compliance. Subsequently, it resumed its Indian operations. KuCoin was also allowed to resume operations after paying a penalty of Rs 34.5 lakh.
India’s Crypto Regulatory Landscape
India is actively working on its crypto regulations, with a consultation paper expected to be released by September or October this year. The paper will explore options for either banning or legalizing crypto assets in India.
The government is also closely monitoring cryptocurrency-related hacks and frauds in India, as seen with the $230-million loss suffered by WazirX due to a cyberattack in July.
The crypto industry in India is keenly watching these developments, as they will significantly impact the future of digital assets in the country.
