India’s Financial Intelligence Unit (FIU) Calls for Ban on Crypto Exchanges
The Financial Intelligence Unit (FIU) in India has requested a ban on nine cryptocurrency exchanges in the country. This move is part of India’s efforts to crack down on illegal crypto activities.
Non-Compliance with AML Regulations
According to the FIU, these exchanges have been operating illegally as they failed to register with the agency and comply with anti-money laundering (AML) and anti-terrorist financing regulations.
“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,” the FIU statement said.
Due to their non-compliance, the FIU has requested that the Ministry of Electronics and Information Technology block the websites of these exchanges. The nine exchanges include Binance, Kucoin, Kraken, Huobi, Gate.io, Bittrex, MEXC Global, and Bitfinex.
The FIU stated:
“Virtual Digital Asset Service Providers (VDA SPs) operating in India (both offshore and onshore) and engaged in activities like the exchange between virtual digital assets and fiat currencies are required to be registered with FIU IND as Reporting Entities and comply with the set of obligations as mandated under the Prevention of Money Laundering Act (PMLA) 2002.”
It is important to note that compliance with the FIU is not dependent on the physical presence of the exchange in India. Even offshore exchanges must register and fulfill their obligations under the PMLA.
India’s Strict Crypto Regulation
Cryptocurrency exchanges are allowed to operate in India, but they must adhere to strict policies. The country has also implemented stringent taxation and regulation on crypto to mitigate associated risks.
In March 2022, India introduced a 30% capital gains tax on cryptocurrencies and imposed a 1% tax deduction at source on every transaction. This tax policy faced criticism from industry players, including Binance’s former CEO, Changpeng Zhao.
Additionally, the Governor of the Reserve Bank of India (RBI), Shaktikanta Das, has called for a complete ban on the crypto industry in India.
Hot Take: India Takes a Firm Stance on Illegal Crypto Activities
India’s Financial Intelligence Unit (FIU) has requested a ban on nine cryptocurrency exchanges operating in the country due to their non-compliance with registration and AML regulations. This move is part of India’s broader efforts to regulate the crypto industry and mitigate associated risks.
While cryptocurrencies are allowed in India, strict policies regarding taxation and regulation have been implemented. The recent tax policy has faced backlash, highlighting the challenges of balancing compliance and industry growth.
India’s stance on crypto is clear, as the Governor of the Reserve Bank of India has repeatedly called for a complete ban. It remains to be seen how these regulatory measures will shape the future of the crypto industry in India.
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