- Nine crypto exchanges will have their URLs blocked in India as per FIU IND directions
- The instructions come in place as the exchanges have not complied with the Prevention of Anti-Money Laundering rules
The world’s largest exchange, Binance, comes under another regulator’s radar. This time, the exchange is not the only crypto entity to hit the spotlight. Earlier today, India’s financial wing gave directions to block the URLs of Binance and eight other crypto exchanges. The regulatory authority under authority in this subject matter is the Financial Intelligence Unit India (FIU IND).
Crypto exchanges flagged for lack of compliance
The authority has asked the Ministry of Electronics and Information Technology to implement the instructions. In a press release, the authority stated that this action was a result of a lack of compliance with the rules under the Prevention of Money Laundering Act provisions. Furthermore, the Indian financial authority has claimed that a “complaint Show Cause Notice” has been issued to these 9 crypto exchanges.
The crypto exchanges are Binance, Kraken, Bitfinex, Bittrex, Gate.io, Kucoin, Huobi, Bitstamp, and MEXC Global. The press release read,
“FIU IND writes to Ministry of Electronics and Information Technology to block URLs of the nine entities operating illegally without complying with the provisions of PML Act in India”
Under the Prevention of Money Laundering Act (PMLA), 2002, crypto exchanges, both within India and outside, are required to be registered with the FIU IND. These entities should represent as a Reporting Entity and follow the rules under the Money Laundering Act, which includes record keeping, and reporting.
So far, 31 crypto exchanges have registered with the FIU IND. However, according to the financial regulator, several crypto exchanges with substantial Indian users have not been “getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.”
Registration aside, India has introduced one of the most stringent tax systems for crypto investors. India’s financial ministry passed a bill mandating 1% Tax Deduction at Source (TDS) for transactions exceeding INR 5000 (over $600) in one accounting period. Additionally, the government has also taxed 30% of profits arising from crypto sales, and trades.
This rule has, however, been contested by several actors within the Indian crypto space. Some have called for the TDS to be reduced to 0.01%, with a study showing that most users were moving their assets offshore as a result.
