FIU-IND directs removal of unregistered crypto apps, warns investors
New Delhi
The Financial Intelligence Unit of India (FIU-IND) has issued notices to 25 offshore virtual digital asset (VDA) service providers for allegedly violating India’s anti-money laundering (AML) laws, according to a statement from the Finance Ministry. These notices were issued under Section 13 of the Prevention of Money Laundering Act (PMLA), which empowers authorities to investigate companies, inspect records, verify customer information, and demand reports on suspicious transactions. Violators may face fines up to Rs 1 lakh per breach.
Notable firms receiving notices include CoinW (Singapore), BTCC (UK), Changelly (Hong Kong), and Paxful (US), alongside others such as Huione (Cambodia), CEX.IO (US/UK), LBank (British Virgin Islands), PrimeXBT (Saint Lucia), Coinex (Hong Kong), Remitano (Singapore), Poloniex (Boston), BitMex (Seychelles), and LCX (Liechtenstein).
Separately, FIU-IND has also issued directives under the Information Technology Act, 2000, demanding removal of apps and websites operating in India without proper PMLA registration.
Established in 2004, FIU-IND is the primary agency for collecting and analyzing suspicious financial transaction data. While 50 VDA providers are registered with FIU-IND, many offshore firms still operate without registration, thus falling outside India’s AML and counter-financing of terrorism (CFT) framework.
The government emphasized that all VDA service providers catering to Indian users—regardless of location—must register with FIU-IND and comply with PMLA regulations. This includes crypto-to-fiat exchanges, virtual asset transfers, safekeeping services, and any operations controlling digital assets. Registration is mandatory even without a physical Indian presence.
The Finance Ministry also cautioned users about the high risks of unregulated crypto products and non-fungible tokens (NFTs), noting that no regulatory protections exist for investors facing losses.
