FIU IND Notice on Crypto Currency
Crypto Currency Platforms Including Binance and Kucoin Receive Compliance Show Cause Notices from FIU IND
The Financial Intelligence Unit India (FIU IND) has recently taken action against nine cryptocurrency platforms, including Binance, Kucoin, and Huobi, by issuing compliance show cause notices. These Virtual Digital Assets Service Providers (VDA SPs) have been urged to adhere to the provisions of the Prevention of Money Laundering Act (PML) Act.
According to the PML Act, VDA SPs operating in India, both offshore and onshore, are required to register with FIU IND as Reporting Entities and comply with a set of obligations. These activities include the exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets, and instruments enabling control over virtual digital assets.
The accused Offshore VDA Service Providers, such as Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and MEXC Global, have been targeted by FIU IND. As part of their efforts, FIU IND has requested the Secretary of MeitY to block the URLs of entities that are operating illegally without complying with regulations.
This action aims to regulate activities like virtual asset-fiat currency exchange, asset transfers, and safekeeping, aligning with the activity-based obligations outlined in the PML Act. Despite serving a significant Indian user base, these listed service providers have been accused of operating without due registration and evading Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) frameworks.