India's FIU-IND Cracks Down on Offshore Crypto Firms, Mandates Registration
The Financial Intelligence Unit of India (FIU-IND) has taken stern action against offshore virtual digital asset (VDA) service providers, indeed issuing notices to 25 companies for violating anti-money laundering laws and mandating registration for all VDA service providers serving Indian users.
FIU-IND, established in 2004, is responsible for monitoring suspicious financial activities, including those involving virtual digital assets like cryptocurrencies. The unit has sent notices under the Prevention of Money Laundering Act (PMLA) to 25 offshore companies for operating without registration and violating anti-money laundering rules. While the specific names of these companies have not been disclosed, they include prominent international players like CoinW, BTCC, Changelly, Paxful, and others.
To combat this, the government has made it compulsory for all VDA service providers catering to Indian users to register with FIU-IND, indeed regardless of their physical location. Companies found violating these rules face penalties of up to Rs 1 lakh per breach. Additionally, FIU-IND has issued notices under the Information Technology Act, 2000, for the removal of unregistered apps and websites operating in India.
The Finance Ministry has also warned users about the risks associated with unregulated crypto products and non-fungible tokens (NFTs). As of now, around 50 VDA service providers have registered with FIU-IND, but several offshore firms continue to operate without registration, keeping them outside the anti-money laundering and counter-financing of terrorism (AML-CFT) framework. FIU-IND's actions aim to strengthen India's financial system and protect users from potential money laundering activities.
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