FIU urges MeiTY to block URLs of 9 offshore cryptocurrency platforms including Binance, Kucoin, and Huobi
The Financial Intelligence Unit (FIU), a division of the Finance Ministry in India, has sent show cause notices to nine offshore cryptocurrency and virtual digital assets platforms, such as Binance and Kucoin. These notifications were issued due to their failure to comply with anti-money laundering regulations, potentially dealing a significant blow to the cryptocurrency sector in India.
Apart from just the notifications, the FIU has even taken the next step of writing to the Ministry of Electronics and Information Technology (MeiTY) to block the URLs of these nine parties who are operating illegally without following the provisions of India’s PML Act.
Apart from Binance and Kucoin, other Virtual Digital Asset Service Providers (VDA SPs) that have been given notice not to register as reporters with FIU-India include Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfenex.
Virtual digital asset service providers operating in India (both offshore and onshore) engaged in activities such as exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, custody or management of virtual digital assets or virtual digital asset management instruments, etc. are required to register FIU in the IND as a “reporting entity” and comply with obligations under the Prevention of Money Laundering Act, 2002 (PMLA).
The obligation is activity based and not dependent on physical presence in India.
According to the Ministry of Finance, the order imposes reporting, accounting and other obligations under the PML Act on SPs of the VDA, which also include registration with the FIU IND.
“As part of the regulatory drive against offshore entities, the Financial Intelligence Unit India (FIU IND) has issued notices to nine offshore Virtual Digital Assets Service Providers (VDA SP) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA), Ministry of said in a statement.
According to the I-T Act, reporting entities must submit statements of financial transactions (SFT) to the tax authority, which contain information on certain financial transactions or the reportable accounts maintained by them during the year.
In March, the government had brought VDA SPs under the purview of Anti-Money Laundering/Anti-Financing of Terrorism (AML-CFT) as per the provisions of PMLA.
(with income from PTI)
