The Financial Intelligence Unit-India (FIU-IND), a central agency, has issued notices and called upon the Indian government to block access to nine overseas cryptocurrency exchanges. The step has been taken to curb alleged non-compliance with regulations aimed at preventing money laundering. Among the exchanges targeted are prominent names like Binance, Bittrex, Huobi, and MEXC Global.FIU-INDs show cause noticesIn an official statement released by the finance ministry, it was revealed that the FIU-IND had issued compliance Show Cause Notices to the identified offshore Virtual Digital Assets Service Providers (VDA SPs). These notices were issued under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA). The FIU-IND directly reports to the Economic Intelligence Council (EIC), headed by the Union finance minister.The statement mentioned that the Director of FIU-IND had written to the secretary of the Ministry of Electronics and Information Technology (MeitY) to block the URLs of the entities identified, citing their operations as illegal due to non-compliance with the provisions of the PML Act in India.VDA SPs and cryptocurrency concernsVirtual Digital Assets Service Providers (VDA SPs) is a classification for cryptocurrency exchanges that facilitate the storage, purchase, or sale of cryptocurrencies such as Bitcoin and Ether. Cryptocurrencies have been a persistent cause of concern globally, as they operate without direct regulation, raising apprehensions among officials and regulators regarding their potential impact on financial stability.The obligation imposed on VDA SPs is activity-based and is not contingent on physical presence in India. These regulations mandate reporting, record-keeping, and other obligations under the PML Act, including registration with the FIU-IND. The statement noted that, to date, 31 VDA SPs have registered with FIU-IND. However, it highlighted that several offshore entities serving a substantial portion of Indian users were not adhering to registration requirements.Entities targeted by FIU-INDThe nine entities that received Show Cause Notices from FIU-IND include:Binance (Addresses linked to tax havens like Seychelles and Cayman Islands)Kucoin (Linked from Seychelles and Singapore)Huobi (Hong Kong and Singapore)Kraken (British Virgin Islands)Gate.io (Cayman Islands)Bittrex (United States)Bitstamp (Luxembourg, London, British Virgin Islands, and New York)MEXC Global (Singapore and Seychelles)Bitfinex (British Virgin Islands)The action against these exchanges is part of an ongoing effort to bring cryptocurrency activities under regulatory oversight and ensure compliance with anti-money laundering measures.
