India’s Financial Intelligence Unit (FIU) will review petitions this week from seven major offshore cryptocurrency exchanges seeking to resume operations in the country.
The exchanges—Bitfinex, MEXC Global, Kraken, Huobi, Gate.io, Bittrex, and Bitstamp—were previously banned for not complying with India’s Prevention of Money Laundering Act (PMLA).
A senior official confirmed to ET that the hearings will determine whether these platforms can operate again. The exchanges must commit to following PMLA regulations, including proper registration, Know Your Customer (KYC) norms, and reporting suspicious transactions. Additionally, they will need to pay penalties, with the exact amounts to be decided based on their submissions.
These platforms also face a significant hurdle: settling overdue goods and services tax (GST) estimated at ₹2,900 crore. Notices will soon be issued to other foreign crypto exchanges that previously operated in India, and they may be required to relocate their servers to comply with a Ministry of Electronics and Information Technology (MeitY) directive.
The regulatory landscape for crypto entities in India shifted in March 2023 when virtual digital assets service providers were brought under the Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT) framework. Since then, they are required to register in India.
As of now, 38 crypto entities are registered under this framework. In December 2023, the FIU instructed MeitY to block the links of these seven exchanges, along with Binance and Kucoin, due to non-compliance with PMLA regulations.
In March 2024, Kucoin’s ban was lifted after a penalty of Rs 34.5 lakh was imposed. Recently, Binance registered as a reporting entity with the FIU-India and paid a fine of Rs 18.82 crore for PMLA non-compliance.
Also Read: India Ranks 1st in Global Crypto Adoption Index: Chainalysis
