- The Indian government has tackled the regulation of offshore crypto platforms catering to Indian users.
- The Anti-Money Laundering (AML) and Countering of Financial Terrorism (CFT) guidelines are now enforceable on offshore exchanges serving the Indian market.
- Defaulting entities will face enforcement under the Prevention of Money Laundering Act.
The Indian government, under the Ministry of Finance, has tackled the regulation of overseas crypto exchange platforms and Virtual Digital Assets (VDAs) catering to Indian users. Per a disclosure from the government dated December 4, the Anti-Money Laundering (AML) and Countering of Financial Terrorism (CFT) guidelines are now enforceable on offshore exchanges serving the Indian market.
Notably, the document stated that the steps to registration for implied entities are now live. Interestingly, at least 28 virtual asset providers serving Indians have been reported to have registered with the Financial Intelligence Unit-India (FIU-IND). The entities include crypto exchanges and wallet providers such as Coin DCX, WazirX, Unocoin, Zebpay, Coinswitch, Mudrex, Onramp, Giottus, and Bytex, among others.
It is worth mentioning that the term “entities” collectively encompasses banks, financial institutions, and intermediaries, which must all adhere to the AML and CFT regulations. According to the anti-money laundering law, reporting entities are obliged to uphold Know Your Customer (KYC) requirements by maintaining detailed records. These records include the full KYC details and documents substantiating the identity of both clients and beneficial owners. Additionally, reporting entities are required to retain account files and business correspondence associated with their clients.
Furthermore, the directive outlined that failure of the crypto exchange platforms serving the Indian market to comply with the AML and CFT guidelines would lead to actions against the defaulting entities. Specifically, the enforcement would be in accordance with the Prevention of Money Laundering Act (PMLA). Notably, the PMLA serves as the foundational component of the legal framework India established to combat money laundering activities within the country.
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