India has intensified its crackdown on overseas crypto exchanges, targeting platforms such as Binance, Kraken, KuCoin, and Huobi for allegedly operating illegally. The Financial Intelligence Unit (FIU) has taken action by issuing compliance show-cause notices to these entities and has urged the information ministry to block access to their websites, as disclosed in a statement released late Thursday.
According to the FIU statement, despite serving a significant portion of Indian users, various offshore entities have failed to register and comply with the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.
India has been steadily tightening its oversight of digital assets this year, imposing money-laundering provisions on the crypto sector. Additionally, authorities introduced a transaction tax in 2022, significantly impacting local crypto exchanges and leading to a sharp decline in trading volumes.
The issuance of a show-cause notice signifies suspicions of misconduct against an individual or entity. It serves as an official request demanding evidence of compliance with Indian laws.
Local exchanges have expressed grievances, attributing the migration of Indian crypto traders to offshore platforms, which do not impose the levy, as a factor further denting their revenues.
