India’s financial crime watchdog is targeting offshore crypto platforms for operating in the country without playing by its rules.
On Tuesday, the Financial Intelligence Unit-India (FIU-IND) issued non-compliance notices under Section 13 of the Prevention of Money Laundering Act to 15 virtual digital asset service providers, all of which are small and medium-sized operators.
The official announcement named Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT, and Guardarian are violators.
India brought crypto platforms or virtual digital asset (VDA) service providers under the same anti–money laundering rules as banks in March 2023. The rule requires any crypto platform that serves Indian customers, irrespective of whether it has office in India or note, to register with the Financial Intelligence Unit–India (FIU-IND). Once registered, these platforms must maintain strict records, verify users, and report suspicious activity to the government.
The FIU also cautioned Indians about risks associated with crypto products and non-fungible tokens (NFTs).
“It is pertinent to mention for the safety and awareness of general public that the Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions,” the official announcement said.
The timing of the latest action is notable. It comes days after The Economic Times reported that Indian users are increasingly moving stablecoins like USDT to platforms in Sweden, Germany, and Singapore, which convert the crypto into gift cards. These cards are then used in India to purchase for groceries, fuel, and gold. This workaround keeps the money out of Indian exchanges and off the radar of Indian authorities entirely.
The FIU-IND first went after nine major offshore exchanges, including Binance, Kraken, and KuCoin, back in December 2023, issuing compliance show-cause notices as detailed by the Press Information Bureau (PIB) and requesting the IT ministry to block their URLs due to illegal operations.
Binance eventually registered with the unit and paid a record INR 18.82 crore penalty for anti-money laundering violations.