The Financial Intelligence Unit, an Indian government agency responsible for examining financial transactions, announced on Thursday that nine global cryptocurrency exchanges, including Binance, Bitstamp, Kraken, Kucoin, Gate.io and Mexc, are operating “illegally” in the country.
These exchanges are reported to be in violation of the local anti-money laundering act. In response to this, the Financial Intelligence Unit has requested the Ministry of Information Technology to take action by blocking the websites of these exchanges.
As part of compliance action against the offshore entities, Financial Intelligence Unit India (FIU IND) has issued compliance Show Cause Notices to following nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA).
The exchanges include: Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, Mexc Global, and Bitfinex.
Director FIU IND has written to Secretary, Ministry of Electronics and Information Technology to block the URLs of said entities that are operating illegally without complying with the provisions of the PML Act in India.
Virtual Digital Asset Service Providers (VDA SPs) operating in India (both offshore and onshore) and engaged in activities like exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets etc. are required to be registered with FIU IND as Reporting Entity and comply with the set of obligations as mandated under Prevention of Money Laundering Act (PMLA) 2002.
“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,” reads statement.
“Till date 31 VDA SPs have registered with FIU IND. However, several offshore entities though catering to a substantial part of Indian users were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.”
