The Financial Intelligence Unit India (FIU IND) has issued Show Cause Notices against nine overseas cryptocurrency exchanges, including Binance and Kraken.
India’s national financial crime authority asserts that it is holding the Prevention of Money Laundering Act, 2022, by issuing the Show Cause Notices, which detail the alleged offences.
The nine firms in question – described by FIU as Virtual Digital Assets Service Providers (VDA SPs) – are Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.
As well as issuing notices to the exchanges, the FIU also requested that the Ministry of Electronics and Information Technology block the firm’s URLs for ‘operating illegally without complying with the provisions of the PML Act in India’.
The exchanges stand accused of offering exchange of virtual digital assets and fiat currencies, transfer of digital assets and safekeeping or administration of virtual digital assets without being registered as Reporting Entities with the FIU.
This obligation ‘is activity-based and not contingent on physical presence in India’, the FIU explained. If the exchanges wish to operate in INdia, they must join the 31 other VDA SPs registered with FIU.
The enforcement actions show a continued mixed approach to cryptocurrency and blockchain in India. Whilst the development may suggest the country’s authorities are standoffish, the possibility of launching a digital Rupee has been discussed in the past, initiating a pilot in 2022.
