New Delhi, In a decisive move, the Indian finance ministry has issued show-cause notices to nine offshore Virtual Digital Assets (VDA) service providers, including Binance, for alleged illegal operations within the country without compliance with local money laundering laws. The entities in question are Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
The finance ministry, in a statement released on December 28, revealed that these VDA service providers, involved in activities like virtual asset exchange and administration, must register with the Financial Intelligence Unit-India and adhere to the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The obligation is not contingent on physical presence but is tied to activity, requiring reporting, record-keeping, and compliance with AML and Counter Financing of Terrorism (CFT) frameworks.
The statement highlighted that, despite catering to a substantial number of Indian users, several offshore entities were not registering and complying with AML and CFT regulations. So far, 31 virtual digital asset service providers have registered with the Financial Intelligence Unit.
This crackdown reflects the global scrutiny on crypto exchanges, with recent high-profile collapses and legal issues. In November, Changpeng Zhao stepped down as the head of Binance following a guilty plea to violating US anti-money laundering laws. The move is part of a multi-billion dollar settlement after an investigation into the world’s largest crypto exchange.
