India Bans Crypto Exchanges Like Binance and Kraken

Indian government takes action against nine offshore cryptocurrency exchanges for alleged violations of PMLA.

Dec 28, 2023 - 19:23
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India Bans Crypto Exchanges Like Binance and Kraken
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On Thursday, the Indian government made an announcement regarding the issuance of show cause notices for compliance to nine offshore cryptocurrency exchanges. These notices were initiated under the Prevention of Money Laundering Act (PMLA) and were administered by India's Financial Intelligence Unit (FIU), a division of the Finance Ministry.

The nine exchanges that received these notices include Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex. Furthermore, the government has initiated steps to block the website URLs of these entities, citing their alleged operation in violation of PMLA provisions within India.

The government did not specify a particular timeframe or the consequences for non-compliance, as there are no established precedents for such actions within the country's crypto space.

This move followed the government's earlier declaration this month, which revealed that 28 domestic crypto service providers had registered themselves with the FIU, a number that has since increased to 31. In March, India's Finance Ministry had mandated that cryptocurrency businesses must register with the FIU, India's anti-money laundering agency, and adhere to various processes outlined in the PMLA. This legal requirement obligated crypto businesses to conduct activities such as Know Your Customer (KYC) verifications.

The FIU clarified that this obligation is linked to the nature of the activity and is not dependent on a physical presence in India. However, it noted that several offshore entities, despite serving a significant portion of Indian users, had not registered and were operating outside the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.

Philip Bohmer Philip is a seasoned journalist that brings clarity to the complex world of cryptocurrencies through his articulate and insightful articles. His passion for blockchain technology fuels his writing, making him a trusted voice in the rapidly evolving digital currency landscape.