Financial Intelligence Unit issues notice to 15 crypto service providers, asks to take down URLs

The Financial Intelligence Unit-India (FIU-IND) has issued notices to 15 virtual digital assets service providers (VDA SPs) for alleged non-compliance with anti-money laundering provisions, the finance ministry said on Wednesday.

The notices have been issued under Section 13 of the Prevention of Money Laundering Act (PMLA), 2002, as part of compliance action against entities operating without adhering to the regulatory requirements in India.

The entities named by FIU-IND include Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT and Guardarian.

FIU-IND has also issued notices to take down applications and URLs associated with these entities that have been found to be operating illegally without complying with the relevant provisions of the PMLA, the ministry said.

Virtual Digital Assets Service Providers were brought under the anti-money laundering and counter-financing of terrorism framework through the PMLA in March 2023.

VDA SPs operating in India, whether offshore or onshore, and involved in exchange of virtual digital assets for fiat currencies, transfer of virtual digital assets, and safekeeping or administration of such assets are required to register with FIU-IND as reporting entities.

The registration and compliance requirements apply based on the nature of activities undertaken and are not dependent on whether a service provider has a physical presence in India, the ministry said.

Registered VDA SPs are required to comply with reporting, record-keeping and other obligations prescribed under the PMLA and rules framed under it.

“It is pertinent to mention for the safety and awareness of general public that the Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions,” the ministry said.