New Delhi, Dec 29: India accused nine offshore cryptocurrency trading companies, including Binance, Kucoin, and Huobi, of operating illegally in the nation on Thursday. As a result, the country moved to restrict the websites of these platforms and issued show cause notices.
The notices were issued under money laundering laws by Financial Intelligence Unit India (FIU IND), the agency that processes information on dubious financial transactions. These companies, technically called virtual digit asset (VDA) service providers, did not comply with the provisions of the anti-money laundering law, the finance ministry said in a late night statement.
Queries emailed to Binance, Kucoin, and Huobi on Thursday seeking comments remained unanswered.
These service providers were brought under the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023, the ministry said.
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The notices were issued under a section of the Prevention of Money Laundering Act that authorizes the government to impose a penalty on the entity, its directors, or employees or issue a warning or instructions.
India is currently undergoing a peer review of its anti-money laundering and counter financing of terrorism framework by the Financial Action Task Force (FATF), a UN body. The review assesses both the technical compliance of its recommendations and the effectiveness of India’s anti-money laundering and anti-terror financing framework.
Director FIU IND has written to the secretary, Ministry of Electronics and Information Technology, to block the URLs of these entities allegedly operating illegally without complying with the provisions of the PML Act in India, the statement said.
Crypto platforms are required to be registered with FIU IND as reporting entities and comply with certain obligations as mandated law, the ministry said. Regulations cast reporting, record keeping and other obligations on these service providers under the law, the statement said.
To date, 31 VDA service providers have registered with FIU IND. However, several offshore entities, though catering to a substantial part of Indian users, were not getting registered, the statement said. (Agencies)
