India’s Financial Intelligence Unit (FIU-India) is set to allow two more offshore crypto exchanges to resume operations by March 2025, following its approval of Binance and KuCoin. These exchanges were previously banned for failing to comply with anti-money laundering (AML) regulations.
Background and Context
In December 2023, FIU-India issued show-cause notices to nine offshore exchanges, including Binance, KuCoin, Huobi, Kraken, and Bitfinex, for illegal operations. In response, FIU-India requested the Ministry of Electronics and Information Technology (MeitY) to block these exchanges’ URLs in India.
Current Requests and Expansion Process
A source familiar with the matter revealed that FIU-India has received requests from four more offshore crypto platforms. 'At least two of them are likely to be allowed to resume operations by the end of FY25, pending a thorough review of transaction transparency, suspicious transaction reporting, and other related factors,' the source stated. However, the names of the exchanges under review were not disclosed.
Future Prospects and Regulations
FIU-India remains strict on enforcing AML compliance. 'Only after complete due diligence will any exchange be permitted to operate in India. We are very strict about compliance,' added an official. India currently has 48 registered crypto entities. Meanwhile, the government is expected to release a consultation paper by September or October this year to decide whether to ban or legalize crypto assets in the country. This follows a report by the IMF-Financial Stability Board in September 2023, which outlined guidelines for countries on crypto regulation, including investor protection and AML measures.
The government is also monitoring crypto-related hacks, such as the $230 million cyberattack on WazirX in July 2024. The return of Binance and KuCoin to the market after meeting FIU's requirements highlights the strict regulatory environment in the country.
Comments