India reinforces AML laws by regulating virtual digital asset service providers, ensuring compliance and investor protection nationwide.
NEW DELHI (India CSR) — In a major enforcement action aimed at tightening the compliance net around digital financial activities, the Financial Intelligence Unit – India (FIU-IND) has issued notices under Section 13 of the Prevention of Money Laundering Act (PMLA), 2002, to 25 offshore Virtual Digital Assets Service Providers (VDA SPs). These entities were found to be catering to Indian users without adhering to the country’s Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework.
The Compliance Crackdown
The FIU-IND’s notices underline India’s growing vigilance over the crypto ecosystem, especially platforms operating offshore but serving Indian users. These platforms failed to register as Reporting Entities under PMLA provisions despite being mandated since March 2023.
The action sends a strong signal that India’s regulatory environment for Virtual Digital Assets (VDAs) is tightening, aligning with global trends that demand greater accountability and transparency in crypto transactions.
Offshore Exchanges in the Spotlight
The 25 offshore exchanges flagged by FIU-IND include some well-known global names like Huione, Paxful, Changelly, CEX.IO, LBank, BingX, PrimeXBT, BitMex, and Poloniex. They also include emerging platforms like ZooMex, LocalCoinSwap, and CoinCola.
These exchanges operate from diverse jurisdictions such as the United States, Hong Kong, British Virgin Islands, Singapore, Seychelles, and Lithuania. Despite their global operations, many of them actively solicit Indian users without ensuring compliance with Indian financial laws.
Official Notice and URL Takedown
Apart from the non-compliance notices under Section 13 of PMLA, the FIU Director has also exercised powers under Section 79(3)(b) of the Information Technology Act, 2000, directing the takedown of these platforms’ applications and URLs in India.
This step effectively curbs public access to non-compliant offshore platforms that have been operating outside the law. It also acts as a deterrent for others considering similar operations without proper registration.
Registration Status of VDA SPs
So far, 50 Virtual Digital Asset Service Providers have registered with FIU-IND. However, the agency has consistently identified offshore players who continue to remain outside the compliance framework while targeting Indian customers.
These registered entities are now part of India’s AML/CFT reporting ecosystem, which requires robust record-keeping, suspicious transaction reporting, and customer due diligence.
Scope of PMLA for Virtual Assets
Since March 2023, VDA SPs have been brought under the ambit of the Prevention of Money Laundering Act. The law covers a broad range of activities:
- Exchange between VDAs and fiat currencies
- Transfer of VDAs
- Safekeeping and administration of digital assets
- Tools enabling control over VDAs
Under these provisions, VDA SPs must register with FIU-IND regardless of whether they have a physical presence in India. The activity-based regulation ensures that digital platforms serving Indian citizens are subject to the same compliance standards as domestic financial institutions.
Risks to Indian Investors
The government also highlighted that crypto products and NFTs remain unregulated in India. They pose high risks of fraud, money laundering, and terror financing, with no guaranteed recourse for investors in case of loss.
This warning is especially important for Indian investors drawn to offshore platforms promising high returns but lacking accountability or transparency under Indian law.
A Push Towards Safer Digital Finance
The FIU-IND’s enforcement action is part of a broader push to safeguard India’s financial system from illicit flows and unmonitored transactions. By expanding the compliance umbrella, regulators aim to ensure that India’s crypto ecosystem operates within a secure, transparent, and legally sound framework.
Experts note that this move could also encourage more global crypto exchanges to formalize their operations in India. With a clear framework in place, legitimate players may see compliance as a necessary step to access India’s vast and growing digital asset market.
Offshore VDA Service Providers Issued Notices by FIU-IND
| S. No | Name of Offshore VDA SP | Name / Entity Details | Address / Jurisdiction |
|---|---|---|---|
| 1 | Huione | Huione Group – Haowang Guarantee (Formerly Huione Guarantee); Huione Pay PLC; Huione Crypto | 62, Norodom Blvd, Phnom Penh, Cambodia |
| 2 | BC.Game | BlockDance B.V. | Emancipatie Boulevard Dominico F. “Don” Martina 31, Curaçao |
| 3 | Paxful | Paxful Inc. | 3422 Old Capitol Trail, PMP #989, Wilmington, Delaware, 19808, USA |
| 4 | Changelly | Changelly Ltd | 18/F East Town, No.41 Lockhart Road, Wan Chai, Hong Kong |
| 5 | CEX.IO | CEX.IO Ltd | 100 SE 2nd St, Suite 3852, Miami, Florida, 33131, USA |
| CEX.IO Ltd | 2nd Floor, 1-5 Clerkenwell Road, London, EC1M 5PA, UK | ||
| 6 | LBank | LBK Blockchain Co. Limited | Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands |
| 7 | Youhodler | YouHodler SA | Hinds Building, Kingstown, St. Vincent and the Grenadines / Avenue du Théâtre 7, Lausanne, 1005, Switzerland |
| 8 | BingX | BingX Limited | Johnson’s Ghut, Road Town, British Virgin Islands |
| 9 | PrimeXBT | PrimeXBT Trading Services LLC | 1st Floor, Meridian Place Choc Estate, Castries, Saint Lucia |
| 10 | BTCC | BTCC UK Limited | Wisteria Grange Barn, Pikes End, Pinner, London, HA5 2EX, England, UK |
| 11 | CoinEx | CoinEx Exchange | Unit 3A, 12/F, Kaiser Centre, No. 18 Centre Street, Sai Ying Pun, Hong Kong |
| 12 | Remitano | Babylon Solutions Limited | 391A Orchard Road, #12-02 Ngee Ann City, Singapore |
| 13 | Poloniex | Polo Digital Assets Ltd | 99 High Street, Suite 1701, Boston, MA 02110, USA |
| 14 | BitMex | HDR Global Trading Ltd | Global Gateway 8, Rue de la Perle, Providence Mahé, Seychelles |
| 15 | Bitrue | Bitrue Ltd | Centro Bianco, 73 Upper Paya Lebar Road, Suite 06-01C, Singapore 534818 |
| 16 | LCX | LCX AG | Herrengasse 6, 9490 Vaduz, Liechtenstein |
| 17 | Probit Global | ProBit Global Services Limited | Suite 9, Ansuya Estate, Revolution Avenue, Victoria, Mahé, Seychelles |
| 18 | BTSE | BTSE Holdings Limited | V. Nagevidiaus g. 3, Vilnius, Lithuania |
| Vistra Corporate Services Centre | Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands | ||
| 19 | HIT BTC | Hit Solution Limited | Unit 19, 7/F., One Midtown, No.11 Hoi Shing Road, Tsuen Wan, Hong Kong |
| 20 | LocalCoinSwap | LocalCoinSwap | Wan Chai, Hong Kong Island, Hong Kong |
| 21 | AscendEx | AscendEX Ltd | 114 Lavender Street, #09-88, Court Hub 2, Singapore |
| 22 | Phemex | PMX International Limited | 1 Irving Place, #08-11, The Commerze@Irving, Singapore |
| 23 | ZooMex | Zoomex Pte Ltd | Vistra Cayman Trust Limited, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Cayman Islands |
| 24 | CoinCola | CoinCola Limited | Rm D, 16/F, One Capital Place, 18 Luard Road, Hong Kong |
| 25 | CoinW | CoinW Pte Ltd | 33 UBI Avenue 3, #08-43 Vertex, Singapore |
(India CSR)
