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India’s Ministry of Finance issued compliance show cause notices to Binance and eight other offshore exchanges for operating illegally against anti-money laundering policies.
India’s Financial Intelligence Unit (FIU) addressed the notices to Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, according to a circular shared on Dec. 28.
Furthermore, the FIU intends to wall off local investors from these platforms and has taken initial steps to block URLs of non-compliant Virtual Digital Assets Service Providers.
FIU’s announcement noted that the decision to crack down on Binance and other foreign exchanges aligns with India’s Prevention of Money Laundering Act (PMLA). However, no timeframe for cautioned platforms to respond was disclosed.
India’s Ministry made it mandatory for crypto businesses to register with the FIU and comply with PMLA provisions. This move was announced in March, and 28 cryptocurrency firms had registered with the national anti-money laundering agency as of Dec. 4, crypto.news reported.
The obligation is activity-based and is not contingent on physical presence in India. The regulation casts reporting, record keeping, and other obligations on the VDA SPs under the PML Act which also includes registration with the FIU IND.
India’s FIU
Crypto remains a dicey topic in India, with regulators disagreeing over how authorities should treat the nascent industry. India’s Minister of Finance, Nirmala Sitharaman, called on international collaboration toward building a comprehensive crypto framework and urged governments to consider blockchain’s merits.
However, the Reserve Bank of India has not changed its stance on crypto and argued for a blanket ban on virtual currencies.
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