Cryptos are back in the spotlight in India, but for less happy reasons. Nine major exchanges, including Binance and KuCoin, are facing government compliance notices. This approach under the Anti-Money Laundering Law (PMLA) marks an era of increased regulation. These decisive actions now put the future of cryptos in India on hold.
India takes action
The Financial Intelligence Unit (FIU) of theIndiareporting to the Ministry of Finance, took drastic measures against foreign crypto platforms. Under the PMLA, the competent authority has issued notices to 9 exchanges for their alleged non-compliance with the country’s anti-money laundering laws. It is Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex. This action is part of a broader approach to regulating the crypto sector in India.
These exchanges are accused ofoperate illegally in India. Indeed, these companies would not comply with PMLA standards, despite a significant Indian clientele. FIU has also taken a step further. The entity has in fact asked the Ministry of Electronics and Information to block the URLs of these entities. The move marks a turning point in how India handles the growing crypto industry.
Towards clearer regulation of crypto?
These government actions are not isolated. They arise after the integration of cryptos within the framework of fight against money laundering and terrorist financing in March of this year. Despite the need to register with the FIU, several global platforms have not adhered to these guidelines. This raises concerns about their compliance and commitment to Indian rules.
The decision to block the URLs of foreign crypto platforms indicates a firm desire by the Indian government to regulate this sector. While 31 crypto companies have already registered with the FIU, the recent initiative specifically targets offshore entities who fail to comply with AML and CFT frameworks. This is despite the fact that they serve a significant portion of Indian users.
Faced with recent measures taken by India, a look at global trends in crypto regulation is necessary. In Europe, the MiCA law has established a solid regulatory framework. On the other side of the Atlantic, the United States is still struggling to define clear regulations. This regulatory divergence highlights the growing importance of harmonized approach to regulate the crypto market on a global scale.
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