India Flags 15 Crypto Platforms Over AML Violations

India’s Financial Intelligence Unit (FIU-IND) has taken action against 15 virtual digital asset service providers over alleged violations of the country’s anti-money laundering requirements.

The financial crime agency issued non-compliance notices under Section 13 of the Prevention of Money Laundering Act to the crypto platforms on Tuesday. All 15 firms were described as small- or medium-sized operators, including Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, FixedFloat, WhiteBIT and Guardarian.

India placed crypto exchanges and other virtual digital asset (VDA) service providers under the country’s anti-money laundering framework in March 2023, bringing them under requirements similar to those applied to financial institutions.

Under the rules, any crypto platform providing services to Indian users must register with FIU-IND, regardless of whether the company maintains a physical office in India. Registered platforms are required to keep detailed transaction and customer records, conduct user verification and report suspicious transactions to authorities.

The FIU also issued a public warning about the risks associated with crypto assets and non-fungible tokens (NFTs). It stressed that these products remain unregulated and can involve significant risks, while users may have limited or no regulatory avenues for recovering losses arising from such transactions.

The latest enforcement action comes shortly after The Economic Times reported that some Indian crypto users are transferring stablecoins such as USDT to platforms operating in countries including Sweden, Germany and Singapore. Those platforms reportedly convert the assets into gift cards, which can then be used in India to purchase items such as groceries, fuel and gold.

Such a mechanism could allow transactions to bypass Indian crypto exchanges and potentially remain outside the direct oversight of domestic authorities.

FIU-IND previously targeted nine large offshore crypto exchanges in December 2023, including Binance, Kraken and KuCoin. According to information released by the Press Information Bureau, the agency issued compliance-related show-cause notices and asked the IT ministry to block the platforms’ URLs over alleged illegal operations in India.

Binance later completed registration with FIU-IND and was ordered to pay INR 18.82 crore in penalties for anti-money laundering violations, marking a record fine in the country at the time.