fiu: FIU issues notice to Binance, 8 other offshore crypto platforms, writes to MeitY for blocking of URLs

The anti-money laundering authority has written to the secretary of the Ministry of Electronics and Information Technology to block the links of the said entities that are operating illegally without complying with the provisions of the PMLA, the finance ministry said in a statement on Thursday.

Other operators of virtual digital assets and cryptocurrencies that have been served show-cause notices include Kucoin, Huobi, Gate.io, Bittrex, and Bitstamp.

“This move is clearly sending the message to the industry that the crypto industry will have to abide by the AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) norms of the country and operating from foreign country to evade the norms will not be allowed,” said Dhruv Garg, Lawyer & Tech Policy Advisor.

Also read | Tier two, tier three cities emerge as crypto trading hubs: report

FIU is the central, national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions, including money laundering and terror financing, to enforcement agencies in other countries.

Discover the stories of your interest

In March 2023, virtual digital assets service providers were brought into the ambit of Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT) framework under the provisions of the PMLA Act, 2002.They are required to be registered with FIU-Ind as reporting entity and comply with the set of obligations as mandated under the Act.

Reporting entities under PMLA have to maintain know your client (KYC) details and other documents relating to transactions on clients and beneficial owners. Under the anti-money laundering law, VDAs have to keep documents evidencing the identity of their clients and beneficial owners as well as account files and business correspondence relating to clients.

The obligation is activity-based and is not contingent on physical presence in India.

The anti-money laundering guidelines and reporting requirements are applicable to offshore crypto exchanges servicing the Indian market.

“If FIU is effective in blocking these crypto entities through MeitY on a regular basis, then offshore route as a business model for these entities will become unviable to circumvent domestic AML laws,” Garg said.

As many as 31 crypto exchanges or virtual digital asset service providers have registered with FIU-Ind. These include CoinX, Unocoin, Bitbns, Zebpay, WazirX, Coinswitch, CoinswitchX, and Rario.

The anti-money laundering authority has written to the secretary of the Ministry of Electronics and Information Technology to block the links of the said entities that are operating illegally without complying with the provisions of the PMLA, the finance ministry said in a statement on Thursday.

Other operators of virtual digital assets and cryptocurrencies that have been served show-cause notices include Kucoin, Huobi, Gate.io, Bittrex, and Bitstamp.

“This move is clearly sending the message to the industry that the crypto industry will have to abide by the AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) norms of the country and operating from foreign country to evade the norms will not be allowed,” said Dhruv Garg, Lawyer & Tech Policy Advisor.

Also read | Tier two, tier three cities emerge as crypto trading hubs: report

FIU is the central, national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions, including money laundering and terror financing, to enforcement agencies in other countries.

Discover the stories of your interest

In March 2023, virtual digital assets service providers were brought into the ambit of Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT) framework under the provisions of the PMLA Act, 2002.They are required to be registered with FIU-Ind as reporting entity and comply with the set of obligations as mandated under the Act.

Reporting entities under PMLA have to maintain know your client (KYC) details and other documents relating to transactions on clients and beneficial owners. Under the anti-money laundering law, VDAs have to keep documents evidencing the identity of their clients and beneficial owners as well as account files and business correspondence relating to clients.

The obligation is activity-based and is not contingent on physical presence in India.

The anti-money laundering guidelines and reporting requirements are applicable to offshore crypto exchanges servicing the Indian market.

“If FIU is effective in blocking these crypto entities through MeitY on a regular basis, then offshore route as a business model for these entities will become unviable to circumvent domestic AML laws,” Garg said.

As many as 31 crypto exchanges or virtual digital asset service providers have registered with FIU-Ind. These include CoinX, Unocoin, Bitbns, Zebpay, WazirX, Coinswitch, CoinswitchX, and Rario.