The Financial Intelligence Unit (FIU) of India issued notices against 25 offshore exchanges this week. The agency said some of these exchanges failed to register their operations, while the others did not comply with the country’s anti-money laundering regulations.
BingX, LBank, CoinW, ProBit Global, BTCC, AscendEX, Zoomex, CEX.IO, and Poloniex are among platforms that have now been directed to withdraw their operations from the world’s most populated country.
“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 statement from the FIU said on October 1.
Out of the 25 named exchanges, 14 collectively hold over $9 billion in user assets, a TechCrunch report said citing data from CoinMarketCap.
As of now, the FIU said, 50 crypto service providers have registered with the agency.
“However, from time to time the entities which are catering to Indian users but not getting registered and thus remain outside the AML/CFT framework are identified by the FIU IND,” the FIU noted.
For now, official responses to the notices remain awaited from the impacted exchanges.
In the lack of a comprehensive regulatory regime to oversee crypto activities, the FIU is seemingly increasing scrutiny over the sector.
All operators from the virtual digital assets (VDA) sector are mandated to register with the FIU. Those identified failing to do so, face restrictions in the market. In the past, Binance and Kraken have been among exchanges that have had to briefly exit the country, register with the FIU, and then re-launch. In addition, all VDA platforms
“These obligations are activity-based and are not contingent on physical presence of the entity in India. The regulation casts reporting, record keeping, and other obligations on the VDA service providers under the PML Act which also includes registration with the FIU IND,” the agency noted.