India’s Financial Intelligence Unit (FIU-India) is expected to give clearance to two more offshore cryptocurrency exchanges to resume operations in the country by March 2025. The move follows the approval given to Binance and KuCoin earlier this year.
FIU-India, responsible for overseeing anti-money laundering (AML) compliance, is currently reviewing requests from four offshore exchanges that were previously banned for non-compliance with India’s AML regulations, according to a report from Business Standard .
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India Examines Exchanges
The report, citing an insider, said FIU-India is thoroughly examining these exchanges, focusing on key issues such as transaction transparency and suspicious activity reporting.
“We expect that at least two of the four exchanges will be allowed to operate by the end of FY25, provided they pass stringent checks,” the source revealed.
However, the names of the exchanges under review were not disclosed. The official also mentioned that penalties similar to those imposed on Binance and KuCoin may apply depending on the findings.
“Only after a full due diligence process will we grant any exchange permission to resume operations in India,” the insider emphasized. Strict adherence to India’s regulatory requirements will be key in determining which exchanges can operate.
ds up! 👀 #FIUIndia is considering two more #crypto exchanges to join #Binance and #KuCoin in resuming India ops. 🇮🇳 Don't miss the latest updates in the dynamic world of crypto! #CryptoNews pic.twitter.com/G3dQgqBroo
— BitsPuls (@bitspuls) September 5, 2024
In response to earlier violations of India’s AML laws, FIU-India issued show cause notices to nine offshore cryptocurrency exchanges on December 28, 2023. The notices were issued for conducting operations in India without adhering to the required regulations.
As a result, FIU-India requested the Ministry of Electronics and Information Technology (MeitY) to block the URLs of these exchanges in India. The list of exchanges included major players like Binance, Huobi, Kraken, and Bitfinex.
In August 2024, Binance complied with Indian regulations and registered itself as a reporting entity with FIU-India, allowing it to resume operations. KuCoin, similarly, was allowed to operate after paying a fine of Rs 34.5 lakh in March 2024.
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India to Release Consultation Paper
The Indian government is also expected to release a consultation paper on cryptocurrencies later this year, which will explore whether to ban or legalize crypto assets in the country.
The International Monetary Fund and the Financial Stability Board (IMF-FSB) have already published guidelines on crypto regulations, including investor protection and anti-money laundering measures, which could influence India’s decision.
As reported, Finance Minister Nirmala Sitharaman has upheld the controversial crypto tax regulations during the announcement of the fiscal year 2024-2025 budget.
Despite extensive lobbying from the cryptocurrency industry, which presented substantial evidence to advocate for a reduction in the tax-deducted-at-source (TDS) policy from 1% to 0.01%, the existing rules remain unchanged.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
