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- The URLs of nine crypto exchanges will be blocked in India as per the directions of the FIU IND
- The instructions are in effect because the exchanges have failed to comply with anti-money laundering rules
The largest exchange in the world, Binance, comes under the radar of another regulator. This time, the exchange isn’t the only crypto entity in the spotlight. Earlier today, India’s financial wing issued instructions to block the URLs of Binance and eight other crypto exchanges. The supervisory authority in this area 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 the result of non-compliance with the rules set out in the provisions of the Money Laundering Prevention Act. 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 the Ministry of Electronics and Information Technology to block URLs of the nine entities operating illegally without complying with the provisions of the PML Act in India”
Under the Prevention of Money Laundering Act (PMLA), 2002, crypto exchanges, both within and outside India, must be registered with the FIU IND. These entities must act as reporting entities and follow the rules of the Money Laundering Act, including 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 are “unregistered and fall under the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) frameworks.”
Apart from registration, India has introduced one of the strictest tax systems for crypto investors. India’s Ministry of Finance has passed a bill mandating 1% tax deduction at source (TDS) for transactions exceeding INR 5,000 (over $600) in a single accounting period. Moreover, the government has also taxed 30% of the profits resulting from the sale and trading of cryptocurrencies.
However, this rule has been challenged by several actors within the Indian crypto space. Some have called for a reduction in TDS to 0.01%. A survey shows that most users move their assets abroad as a result.
