FIU Sends PMLA Notices, Blocks 25 Offshore Crypto Platforms
India’s Financial Intelligence Unit (FIU-IND) has issued PMLA notices to 25 offshore crypto platforms under the Prevention of Money Laundering Act. The regulator has ordered offshore crypto platforms such as Paxful, Changelly, CEX.IO, BitMEX and Poloniex to register as reporting entities, strengthen AML compliance, maintain records and remove illegal apps operating in India. Non-compliant platforms face service blocks, fines up to INR100,000 per breach and legal action, following December 2023 show-cause orders and January 2024 access bans. FIU-IND also mandates cybersecurity audits for exchanges amid rising fraud, while India’s 30% capital gains tax, 1% TDS and 18% GST on digital asset trades remain in force. To date, fifty service providers including Coinbase, Binance, KuCoin and Liminal Custody have enrolled, with industry leaders praising the crackdown for enhancing transparency and user protection.
Neutral
The enforcement targets offshore crypto platforms with clear AML and cybersecurity requirements, offering regulatory clarity that may restore confidence among compliant operators. In the short term, some platforms could see reduced access or face fines, potentially affecting trading volumes offshore. Over the long term, mandatory registration and audits are likely to boost trust, drive migration to compliant services and support market stability in India. Overall, the move balances enforcement with a path to legal operation, yielding a neutral impact on prices.