India takes steps to block Binance, Huobi, other global crypto exchange URLs
India’s Financial Intelligence Unit had issued compliance notices to nine foreign virtual digital asset service providers for allegedly operating illegally and violating Anti-Money Laundering regulations.
Among the crypto service providers are global crypto exchanges Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex. According to a press release on Dec. 28, the unit requested the Ministry of Electronics and Information Technology block the companies’ URLs, presumably to prevent their websites from being accessed in the country.
“Till date 31 VDA SPs have registered with FIU IND. However, several offshore entities though catering to a substantial part of Indian users were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework,” the document reads.
Digital asset providers operating in the country, whether based within India or offshore, are subject to specific regulatory requirements, such as registration with the Financial Intelligence Unit as a “Reporting Entity.” Once registered, they must follow the regulations outlined in the Prevention of Money Laundering Act (PMLA) 2002. This act mandates a set of obligations designed to prevent money laundering activities, including Know Your Customer (KYC) guidelines for onboarding clients.
India was ranked as the top country in Chainalysis’ global crypto adoption index of 2022, becoming the second-largest market by raw estimated transaction volume globally, behind only the United States.
Growing crypto adoption has prompted India’s regulators to take action. The country is working on a crypto regulatory framework based on the joint recommendations of the International Monetary Fund and the Financial Stability Board.
The framework — scheduled to be released in 2024 — is likely to include advanced KYC rules for crypto companies and require the release of real-time proof-of-reserve audits. It’s also expected to propose a uniform tax policy across nations and bring crypto exchanges under the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India.
