India’s Financial Intelligence Unit (FIU) has revealed that 49 virtual currency exchanges have completed registration under the country’s anti-money laundering framework for 2024-25.
This development is an important step in strengthening regulatory oversight of the country’s growing digital asset sector.
India’s FIU announces that 49 crypto companies have met AML norms for FY24-25
Most of the registered platforms are domestic, with 45 exchanges operating in India, according to FIU’s latest annual report. The remaining four are offshore platforms registered as reporting entities with the FIU. This allows us to continue to serve our users in India under India’s compliance framework.
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In India, cryptocurrencies are legally classified as virtual digital assets (VDAs). Additionally, the framework designates the platform that facilitates transactions as a VDA Service Provider (VDA SP).
In 2023, regulators formally brought these entities under the Prevention of Money Laundering Act (PMLA). The FIU requires the VDA SP, as the reporting entity, to submit a Suspicious Transaction Report (STR).
Their duties also include identifying and reporting beneficial ownership of wallets, monitoring fundraising activities such as initial coin offerings and token offerings, and tracking transfers between hosted and non-hosted wallets.
FIU said in its report that STR’s strategic analysis highlighted persistent risks across the crypto ecosystem. While acknowledging the sector’s potential for financial innovation and wealth creation, the agency warned that digital assets are being misused for serious criminal activity. Red flags identified include the use of cryptocurrencies for hawala businesses, illegal gambling, and complex fraud schemes.
“VDAs and VDA SPs, however, pose certain potential money laundering and terrorist financing risks due to their global reach, rapid settlement capabilities, ability to enable peer-to-peer transactions, and potential for anonymity and obfuscation of transaction flows and counterparties,” the report said.
The report also revealed that the FIU has imposed fines totaling 28 billion rupees (approximately $3.1 million) on crypto exchanges found to be in violation during the 2024-25 financial year. In October, the regulator also sent notices to 25 crypto exchanges, including BingX, LBank, CoinW, CEX.IO, and Poloniex, for failing to comply with the country’s anti-money laundering rules.
Several major global exchanges have resumed operations in Indian markets as the crackdown continues. Bybit returned home after meeting local registration requirements and paying a $1 million penalty.
Binance also returned to India in 2024 after paying a $2.2 million fine. In December, Coinbase resumed user onboarding with plans to introduce a fiat on-ramp in 2026.
In parallel with monitoring exchanges, authorities are stepping up efforts against cryptocurrency-related fraud. Recent enforcement actions have dismantled several fraudulent operations, including a decade-long operation to defraud investors through Ponzi schemes promising high returns.
