Presently, India is working on a crypto regulatory framework that is scheduled to take effect in 2024. The framework is based on a joint recommendation of both the International Monetary Fund and the Financial Stability Board.
The Indian government, through its Financial Intelligence Unit (FIU), has moved to block a total of 9 URLs belonging to various global crypto exchanges. The move is said to be in line with the government’s efforts to ensure that digital asset service providers comply with its Anti-Money Laundering regulations. In this regard, India has named Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex on this list of crypto exchanges.
In a Thursday announcement, the FIU confirmed that it has issued compliance notices to all affected providers. It also shared that it has immediately requested that the Ministry of Electronics and Information Technology block their URLs. And by expectations, this will ensure that the websites can no longer be accessed from within India.
Meanwhile, it might be worth noting that the latest action was always a matter of time. India’s Finance Ministry has since March ordered all crypto-related businesses to register with the FIU. Additionally, the government also mandated them to comply with the provisions of the Prevention of Money Laundering Act (PMLA) 2002.
However, Thursday’s announcement shows that, so far, only 31 crypto businesses have duly registered with the FIU. Part of the statement reads:
“Till date 31 VDA SPs have registered with FIU IND. However, several offshore entities, though catering to a substantial part of Indian users, were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.”
Interestingly, the government did not give a specific timeframe for the companies to adhere to the notices. It also didn’t mention the consequences they can expect to get in the case that they continue violating the rules.
Crypto Adoption in India
India’s current actions, especially as it concerns crypto businesses may have been propelled by the growing popularity of crypto in the region. Recently, India was ranked as the top country in Chainalysis’ global crypto adoption index. The country also became the second-largest market in the world in terms of raw estimated transaction volume. It came right behind the United States.
So, as crypto continues to gain more traction among Indians, the country’s regulators see an increasing need to take action. Presently, India is working on a crypto regulatory framework that is scheduled to take effect in 2024. The framework is based on a joint recommendation of both the International Monetary Fund and the Financial Stability Board.
According to the proposal, the framework will usher in an era of more advanced KYC rules for crypto companies. It will also require them to report, in real-time, their proof-of-reserve audits. Lastly, the framework is also expected to float a uniform tax policy across nations and bring crypto exchanges under an umbrella status as authorized dealers.