- ByBit registers with India’s FIU, signaling a return to operations for traders.
- Regulatory pressures lead to $1.06M fine for ByBit’s non-compliance in India.
- India tightens scrutiny, requiring offshore crypto exchanges to meet AML standards.
Cryptocurrency exchange ByBit has made progress toward getting back to business in India after fixing compliance issues with the country’s financial authorities. On February 5, the exchange announced it had officially registered with India’s Financial Intelligence Unit (FIU) as a reporting entity.
This move follows a temporary suspension of services in the country due to regulatory challenges. The exchange expects to receive a full operating license in the coming weeks, potentially signaling a return to normal operations for its Indian users.
ByBit’s Path to Compliance
To get in line with India’s legal framework, ByBit has agreed to comply with the Prevention of Money Laundering Act (PMLA) 2005. By registering as a reporting entity, the platform now meets the country’s anti-money laundering (AML) requirements.
This shift is a significant step forward, as ByBit had previously suspended operations in India due to increasing regulatory pressures. The exchange had restricted Indian users from making new trades, accessing certain products, and even taking part in promotional campaigns.
Despite these disruptions, ByBit allowed allowed users to close existing positions but prevented them from making adjustments. Importantly, withdrawals remained unaffected, which helped ease some concerns during the suspension. ByBit’s CEO, Ben Zhou, expressed optimism about the future, calling the registration a positive development for Indian traders.
The $1.06 Million Fine
As part of the ongoing regulatory scrutiny, the Financial Intelligence Unit imposed a monetary fine of $1.06 million on ByBit for operating without a license in India. This fine, imposed on January 31, came after a thorough review of ByBit’s operations.
The FIU determined that the platform had violated several provisions of the PMLA, which led to the fine. However, it’s not clear whether ByBit has settled this payment as of the article’s publication.
This isn’t ByBit’s first run-in with regulatory obstacles. The platform faced similar issues in other regions, including the United Kingdom, Canada, France, and Malaysia. In these markets, ByBit suspended services or ceased operations altogether due to non-compliance with local laws.
Related: Bybit Fined €2.25M by Dutch Regulator for Non-Compliance
India’s Crackdown on Crypto Exchanges
India’s regulatory environment for crypto exchanges has grown increasingly strict. In December 2023, the Indian government imposed a ban on nine foreign exchanges for breaking anti-money laundering regulations.
ByBit joins Binance and KuCoin in registering with the FIU after these regulatory challenges. Binance, for example, was required to pay a $2.25 million fine before being allowed to resume operations in India.
Related: Bybit’s Islamic Accounts: Faith-Based Crypto Trading
These actions reflect a broader trend of increased oversight of foreign exchanges operating in India. The government has made it clear that all crypto exchanges, including offshore ones, must register with the FIU to operate legally in the country. This tighter regulation is meant to ensure compliance with AML laws and recover unpaid taxes from global exchanges.
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