India’s Financial Intelligence Unit (FIU-IND) has issued notices to 25 offshore crypto exchanges — including names like BingX, LBank, CoinW, CEX.IO, Poloniex, and ProBit Global — for failing to register under India’s anti-money laundering framework and comply with Know Your Customer (KYC) norms. The regulator has also ordered these platforms to disable their apps and websites for Indian users, though most were still accessible at time of reporting. Together, 14 of the targeted exchanges hold over $9 billion in assets and handle nearly $20 billion in daily trading volume. This move follows India’s 2023 decision to bring virtual asset service providers under the Prevention of Money Laundering Act of 2002, which makes such registration and compliance mandatory. Meanwhile, the government continues to shy away from fully legalizing crypto, opting for a mix of oversight and regulatory caution.
Sources: PIB.gov, TechCrunch
Key Takeaways
– India is enforcing serious consequences on offshore crypto exchanges that serve Indian users but refuse to register or comply with anti-money laundering (AML) rules.
– The volume and asset size tied to the targeted platforms illustrate the scale of offshore crypto exposure that the government now views as a regulatory risk.
– Despite ramping up enforcement, India still leans toward a cautious, partial regulation of crypto, refraining from embracing full legalization due to systemic risk concerns.
In-Depth
In recent days, India has dramatically escalated its regulatory posture toward offshore cryptocurrency exchanges, sending a loud signal that noncompliance will no longer be tolerated. The Financial Intelligence Unit (FIU-IND) has formally issued show-cause notices to 25 virtual digital asset (VDA) exchanges operating outside India but catering to Indian users. The list includes established names such as BingX, LBank, CoinW, CEX.IO, Poloniex, and ProBit Global. The basis for the action is clear: many of these platforms have not registered as reporting entities under India’s Prevention of Money Laundering Act (PMLA) and are alleged to have failed to implement required AML/KYC protocols.
The stakes involved are nontrivial. According to regulatory filings, 14 of those exchanges jointly hold more than $9 billion in assets and facilitate around $20 billion in daily trading volume. Recognizing this, the FIU has not only demanded compliance but also instructed the exchanges to withdraw their apps and websites from public access in India. Though most remain accessible at the time of reporting, the order establishes the government’s resolve.
This crackdown is rooted in legislative changes from March 2023, when India formally folded crypto and virtual asset service providers into its anti-money laundering regime. Under that framework, registering with FIU-IND and adhering to reporting, recordkeeping, and suspicious transaction protocols are mandatory — regardless of whether the platform maintains a physical presence in India. Failure to comply can lead to fines, blocking of online access, and other regulatory consequences. The press release from India’s Ministry of Finance confirms that 50 VDA platforms have already registered, but a significant number continue to operate outside compliance.
Nevertheless, India remains cautious about fully embracing crypto. Recent government documents suggest that rather than legislate a comprehensive crypto law, India plans to maintain partial oversight to mitigate systemic risks. The Reserve Bank of India has often highlighted the volatility and speculative nature of digital assets, warning that unbridled authorization could destabilize financial systems. Thus, while enforcement is tightening, the overall posture still reflects regulatory ambivalence.
This layered approach — combining enforcement with selective openness — also mirrors precedent. For example, Binance was fined in 2024 by FIU for operating without proper registration, prompting it to seek alignment with Indian rules. Meanwhile, major exchanges like Coinbase have pursued regulatory legitimacy by registering with FIU-IND. The recent crackdown is a further step in closing loopholes exploited by offshore platforms that leverage geographical distance to sidestep oversight.
For crypto users in India, this means that platforms previously seen as “offshore” and beyond reach may now face tangible restrictions. Some apps or websites could be blocked; deposit and withdrawal capabilities might be constrained; and transactions may now require stricter verification. For the crypto industry broadly, this indicates that offshore platforms must either comply or risk exclusion from key markets.
In sum, India’s message is now unmistakable: global crypto platforms serving its population must fall in line with domestic AML and regulatory standards. While the country is not rushing to legalize or fully legitimize digital assets, it is moving steadily to ensure that regulatory gaps do not become havens for illicit fund flows. By targeting high-volume exchanges, India is signaling that regulatory coordination—even with entities abroad—is no longer optional.