Summary
India’s Financial Intelligence Unit (FIU) has requested the Ministry of Electronics and Information Technology to block the URLs of nine cryptocurrency exchanges, including Binance, Kraken, and Huobi. The FIU claims that these exchanges are operating illegally and are not compliant with the Prevention of Money Laundering Act. India has been working to align the crypto industry with traditional finance, mandating that crypto companies collect KYC information and register with the FIU. Offshore entities that cater to Indian users but fail to register and comply with AML/CFT frameworks have received show cause notices and had their URLs blocked. Prime Minister Narendra Modi has expressed the need for global crypto regulation, while India has imposed high capital gains taxes on crypto profits and referred to cryptocurrencies as speculative gambling activities. Despite this, India leads the world in grassroots crypto adoption and is the second-largest crypto market by transaction volume.
Key Points
1. India’s Financial Intelligence Unit wants the Ministry of Electronics and Information Technology to block the URLs of nine crypto exchanges, including Binance, Kraken, Huobi, Kucoin, Bittrex, Gate.io, Bitstamp, Bitfinex, and MEXC Global. The unit claims that these virtual asset service providers (VASPs) are “operating illegally” and not complying with the Prevention of Money Laundering Act.
2. India has been working towards aligning the crypto industry with its traditional finance sector. In March, it mandated that crypto companies must collect know-your-customer (KYC) information and register with the Financial Intelligence Unit (FIU).
3. The FIU issued “show cause notices” to the nine blocked VASPs, and while it’s unclear what other ramifications they may face for failing to register, their URLs will be blocked. Prime Minister Narendra Modi has also expressed the need for global crypto regulation and a framework that extends beyond individual countries or groups.