The Financial Intelligence Unit India (FIU IND) has taken stringent action against offshore Virtual Digital Assets Service Providers (VDA SPs) for non-compliance with the Prevention of Money Laundering Act (PMLA) 2002. In March 2023, VDA SPs were brought under the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework. The FIU IND issued Show Cause Notices to nine entities, including Binance, Kucoin, Huobi, Kraken, Gate, Bittrex, Bitstamp, MEXC, and Bitfinex, under Section 13 of the PMLA.
The Director of FIU IND has approached the Secretary of the Ministry of Electronics and Information Technology to block the URLs of these entities operating illegally in India. VDA SPs in India, both offshore and onshore, involved in activities like currency exchange, transfers, and administration of virtual digital assets are required to register with the FIU IND as Reporting Entities. The regulation imposes reporting, record-keeping, and other obligations under the PML Act, regardless of physical presence in India. As of now, 31 VDA SPs have registered with FIU IND, but several offshore entities serving Indian users have yet to comply.
