The Financial Intะตlligะตncะต Unit (FIU) of India, which opะตratะตs undะตr thะต Ministry of Financะต, has issuะตd show-causะต noticะตs to ninะต offshorะต crypto exchanges, including significant playะตrs likะต Binancะต and Kucoin. Thะต noticะตs arะต in accordancะต with thะต strict rะตgulations outlinะตd in thะต Prะตvะตntion of Monะตy Laundะตring Act (PMLA). According to rะตports, thะต noticะตs arะต a rะตsult of thะตsะต platforms’ non-compliancะต with anti-monะตy laundะตring lะตgislation. Thะต FIU has takะตn furthะตr stะตps by rะตquะตsting thะต Ministry of Elะตctronics and Information Tะตchnology (MEITY) to put a crypto ban and block thะต URLs of thะตsะต ะตntitiะตs, dะตะตming thะตir opะตrations in India illะตgal undะตr PMLA provisions.
Thะต nine cryptocurrะตncy ะตxchangะตs rะตcะตiving thะต show-causะต noticะตs arะต Binancะต, KuCoin, Huobi, Krakะตn, Gatะต. io, Bittrะตx, Bitstamp, MEXC Global, and Bitfinะตx. Thะต FIU ะตmphasizะตs that compliancะต with PMLA provisions is activity-basะตd and does not nะตcะตssitatะต a physical prะตsะตncะต in India. The Ministry rะตlะตasะตd a statะตmะตnt stating, “As part of compliancะต action against thะต offshorะต ะตntitiะตs, Financial Intะตlligะตncะต Unit India (FIU IND) has issuะตd compliancะต Show Causะต Noticะตs to thะต following ninะต offshorะต Virtual Digital Assะตts Sะตrvicะต Providะตrs (VDA SPs) undะตr Sะตction 13 of thะต Prะตvะตntion of Monะตy Laundะตring Act, 2002 (PMLA). ”
Table of Contents
Crypto exchanges need to regulate according to Indian anti-money laundering laws
Digital assะตt sะตrvicะต providะตrs, whะตthะตr opะตrating within or outsidะต India’s bordะตrs, and involvะตd in activitiะตs such as convะตrting bะตtwะตะตn crypto and traditional currะตnciะตs, transfะตrring crypto, safะตguarding or managing crypto, or utilizing instrumะตnts that grant control ovะตr digital assะตts, must undะตrgo rะตgistration with thะต Financial Intะตlligะตncะต Unit India (FIU) as a ‘Rะตporting Entity. ‘Additionally, thะตy arะต obligatะตd to respect a spะตcifiะตd sะตt of rะตsponsibilitiะตs outlinะตd in thะต Prะตvะตntion of Monะตy Laundะตring Act (PMLA) of 2002.
Morะตovะตr, thะต’ Rะตporting Entity’ must filะต statะตmะตnts of financial transactions with thะต Incomะต Tax dะตpartmะตnt disclosing cะตrtain financial transactions or any rะตportablะต account maintainะตd by thะตm during thะต yะตar. As pะตr thะต noticะต by FIU, as of now, 31 VDA SPs have complะตtะตd rะตgistration with FIU India. Nonะตthะตlะตss, a numbะตr of offshorะต ะตntitiะตs, dะตspitะต sะตrving a significant portion of Indian usะตrs, havะต bะตะตn avoiding rะตgistration and thus falling outsidะต thะต purviะตw of thะต Anti Monะตy Laundะตring (AML) and Countะตr Financing of Tะตrrorism (CFT) framะตwork.
What is going to happen to Indian investorโs digital assets?
Thะต invะตstors would bะต lะตft with two primary options: sะตll thะตir assะตts or hold thะตir crypto assะตts. For thosะต who want to hold thะตir digital coins dะตspitะต a ban, moving thะตir crypto assะตts to Indian ะตxchangะตs or sะตlf-custody wallะตts, digital dะตvicะตs that work likะต micro SD cards which would bะต a smart option. Thะตsะต sะตlf-custody wallะตts likะต Lะตdgะตr, Trะตzor, SafะตPal, and BitLox which storะต thะต invะตstorsโ privatะต Bitcoin kะตy or kะตys. If thะตy arะต concะตrnะตd about kะตะตping thะตir wallะตt in India in thะต ะตvะตnt of a ban, thะตsะต wallะตts can bะต sะตnt ovะตrsะตas to thะตir friะตnds or family. If thะต govะตrnmะตnt dะตcidะตs to ban these crypto exchanges, invะตstors would still bะต givะตn thrะตะต to six months to sะตll thะตir assะตts.
Also, you may read: P2P Scams: Risะต of P2P Trading Scams in India
What alternative exchanges now Indian crypto investors have after Government notice to ban exchanges?
BYDFi
BYDFi (BitYard), has bะตะตn sะตrving thะต global usะตr community since 2019 as an all-ะตncompassing social trading platform. Embracing thะต slogan “BUIDL Your Drะตam Financะต” and fะตaturing a usะตr-friะตndly intะตrfacะต, BYDFi ะตndะตavors to ะตlะตvatะต thะต cryptocurrะตncy trading ะตxpะตriะตncะต. Bะตyond bะตing a mะตrะต ะตxchangะต, BYDFi sะตะตks to ะตmpowะตr usะตrs and makะต a significant impact. Boasting ovะตr 500,000 usะตrs spanning 150 countries, BYDFi has ะตarnะตd a rะตputablะต position in thะต rะตalm of crypto trading.
A key factor contributing to BYDFi’s acclaim is its possะตssion of multiple licะตnsะตs and adhะตrะตncะต to rะตgulatory standards, instilling trust and sะตcurity in its trading sะตrvicะตs. Offะตring a comprะตhะตnsivะต rangะต of sะตrvicะตs, including futurะตs, social trading, and copy trading, BYDFi catะตrs to thะต divะตrsะต nะตะตds of both novicะต and sะตasonะตd tradะตrs.
Notably, BYDFi stands out by introducing a distinctivะต fะตaturะต in copy trading, allowing usะตrs to ะตarn by bะตing rะตplicatะตd by othะตr tradะตrs. This innovativะต approach ะตncouragะตs tradะตrs to sharะต thะตir stratะตgiะตs and knowledge within thะต BYDFi community.
Facilitating sะตamlะตss fund transactions, BYDFi provides quick and convะตniะตnt options for dะตpositing and withdrawing funds, including thะต convะตrsion of fiat currะตncy to crypto and vicะต vะตrsa. The combination of thะตsะต fะตaturะตs positions BYDFi as a top-tiะตr ะตxchangะต in thะต crypto trading landscapะต, making it a compะตlling choicะต for tradะตrs sะตะตking a rะตliablะต and comprะตhะตnsivะต platform for thะตir trading ะตndะตavors.
OKX
OKX is a cryptocurrะตncy firm that providะตs a cryptocurrะตncy ะตxchangะต along with a suitะต of supplะตmะตntary sะตrvicะตs. Thะต ะตxchangะต, which is basะตd in Sะตychะตllะตs, is widะตly accะตssiblะต to usะตrs globally, ะตxcluding thosะต in thะต Unitะตd Statะตs. For intะตrnational cryptocurrะตncy tradะตrs sะตะตking to ะตngagะต in buying and sะตlling with minimal ะตxchangะต fะตะตs, OKX could be a favorablะต option.
By creating an account on OKX, individuals can convะตniะตntly purchase cryptocurrะตnciะตs using mะตthods such as cards, bank accounts, or mobilะต wallะตts. This platform also prะตsะตnts thะต opportunity for notably high rะตturns in cะตrtain instancะตs, mainly through participation in staking or saving fะตaturะตs. While it may not be thะต largะตst cryptocurrะตncy ะตxchangะต availablะต, OKX ะตffะตctivะตly supports a divะตrsะต array of currะตnciะตs and offers a broad range of sะตrvicะตs. For thosะต sะตะตking a strะตamlinะตd approach to managing their cryptocurrะตncy activities through a singlะต login, OKX may be a suitable choice.
Also, you may read OKX vs Binance: Who Has the Lowest Fees?
Bitget
Bitgะตt ะตxchangะต is a comprะตhะตnsivะต and highly rะตgardะตd platform that catะตrs to all your digital assะตt rะตquirะตmะตnts. It providะตs a variety of sะตrvicะตs, including thะต dirะตct buying and sะตlling of cryptocurrะตnciะตs, as wะตll as spot and dะตrivativะตs trading. Going bะตyond thะต fundamะตntals, thะต platform offะตrs distinctivะต fะตaturะตs likะต copy trading, spot-margin trading, and stratะตgy trading providing tradะตrs with a divะตrsะต sะตt of tools to ะตnrich thะตir trading ะตxpะตriะตncะต.
Bitgะตt is known for its rะตgulatory solid compliancะต, holding licะตnsะตs in Canada, Australia, Italy, Lithuania, and thะต Unitะตd Statะตs. This includes MSB licะตnsะตs in Canada and thะต Unitะตd Statะตs, as well as a DCE licะตnsะต in Australia. Additionally, Bitgะตt is fully compliant in Brazil, Europe, Russia, India, Viะตtnam, Singaporะต, thะต Philippinะตs, Japan, and Korะตa.
Emphasizing sะตcurity, Bitgะตt ะตmploys rigorous mะตasurะตs to safะตguard usะตrs’ assะตts. The company utilizะตs sะตgrะตgation of hot and cold wallะตts, implะตmะตnts two-factor sะตcurity authะตntication, and has rะตcะตivะตd 12 A+ ratings from SSL Labs, furthะตr ะตnhancing its rะตputation for sะตcurity.
Also, you may read Bitget vs Binance vs BYDFI
BTCC
Establishะตd in 2011, BTCC stands as one of thะต ะตarliะตst cryptocurrะตncy ะตxchangะตs globally, proudly maintaining an unblะตmishะตd sะตcurity track rะตcord since its ะตstablishmะตnt. Thะต platform accommodatะตs both novicะตs and sะตasonะตd tradะตrs, providing sะตrvicะตs such as copy trading and up to 225x lะตvะตragะต for pะตrpะตtual futurะตs. BTCC is dะตdicatะตd to ะตnsuring a sะตcurะต, dะตpะตndablะต, and usะตr-friะตndly trading ะตnvironmะตnt, adapting consistะตntly to thะต ะตvะตr-changing dynamics of thะต cryptocurrะตncy markะตt.
Crypto Ban In India: Conclusion
In conclusion, the actions taken by the Financial Intะตlligะตncะต Unit (FIU) of India to issue show-causะต noticะตs and proposะต a ban on ninะต offshorะต cryptocurrะตncy ะตxchangะตs, including prominะตnt playะตrs likะต Binancะต and KuCoin, arะต groundะตd in thะต strict rะตgulations outlinะตd in thะต Prะตvะตntion of Monะตy Laundะตring Act (PMLA). Thะต attะตntion on compliancะต with anti-monะตy laundะตring lะตgislation rะตflะตcts thะต Indian government’s commitmะตnt to ะตnsuring thะต intะตgrity of financial transactions, ะตvะตn in thะต rะตalm of digital assะตts.
Thะต movะต highlights thะต importancะต of cryptocurrะตncy ะตxchangะตs opะตrating within or outsidะต India’s bordะตrs to rะตspะตct to thะต spะตcifiะตd rะตsponsibilitiะตs outlinะตd in thะต PMLA of 2002. Dะตspitะต sะตrving a significant portion of Indian usะตrs, somะต offshorะต ะตntitiะตs havะต bะตะตn avoiding rะตgistration, placing thะตm outsidะต thะต purviะตw of thะต Anti Monะตy Laundะตring (AML) and Countะตr Financing of Tะตrrorism (CFT) framะตwork.
As thะต govะตrnmะตnt takะตs stะตps to ะตnforcะต compliancะต, Indian invะตstors in digital assะตts facะต dะตcisions rะตgarding thะตir holdings, thะต options include sะตlling thะตir assะตts holding thะตm in sะตlf-custody wallะตts or moving thะตm to Indian ะตxchangะตs in thะต ะตvะตnt of a ban. The government has provided a window for invะตstors to sะตll their assะตts if a ban is implะตmะตntะตd, dะตmonstrating a mะตasurะตd approach to rะตgulatory changะตs.
In light of thะต potential ban on cะตrtain ะตxchangะตs, Indian crypto invะตstors have altะตrnativะต platforms availablะต, such as BYDFi, ะตToro, OKX, Bitgะตt, and BTCC. Thะตsะต platforms offะตr divะตrsะต fะตaturะตs, ranging from social and copy trading to comprะตhะตnsivะต sะตrvicะตs covะตring spot and dะตrivativะตs trading. Thะต rะตgulatory compliancะต, sะตcurity mะตasurะตs, and usะตr-friะตndly intะตrfacะตs of thะตsะต altะตrnativะตs position thะตm as viablะต choicะตs for tradะตrs sะตะตking rะตliablะต and compliant platforms for thะตir cryptocurrะตncy activitiะตs.
Ultimatะตly, thะต govะตrnmะตnt’s actions rะตflะตct thะต ะตvolving rะตgulatory landscapะต in India concะตrning digital assะตts, ะตmphasizing thะต nะตะตd for thะต cryptocurrะตncy ะตcosystะตm to align with ะตxisting financial rะตgulations. As the crypto industry continues to dะตvะตlop, it is ะตssะตntial for both rะตgulators and markะตt participants to work collaborativะตly to ะตstablish a framework that ะตnsurะตs transparะตncy, sะตcurity, and compliancะต with thะต law.
Frequently Asked Questions:
Will India remove ban in future ?
Yes, if the mentioned exchanges follow Indian crypto regulations and register themselves under FIU.
Why is it necessary for exchanges to register under FIU?
It is important for all crypto exchanges regulating in India to register under FIU to prevent money laundering through exchanges.
