India’s FIU BanCrypto Exchange Platforms: As the global acceptance of cryptocurrencies continues to rise, so does the number of cryptocurrency exchanges. These platforms enable users, traders, and investors to purchase, sell, and store digital currencies.
Cryptocurrency exchanges, similar to stock exchanges, have seen a surge globally due to the increasing acceptance of digital currencies like Bitcoin, Tether, or Ethereum. These platforms, accessible via desktop or mobile applications, provide users, traders, and investors with the means to buy, sell, and store these virtual currencies, along with a variety of trading and investing tools.
However, in light of India’s FIU Ban, the Indian government has recently taken measures against cryptocurrency exchanges domestically. This includes the blocking of URLs for nine such exchanges within the country. Here’s everything you need to know about this development.
India’s FIU Ban Leads to Blocking of URLs for Select Cryptocurrency Exchanges
On December 28, 2023, the Financial Intelligence Unit (FIU), a division of the Indian Finance Ministry, issued a show cause notice to nine offshore cryptocurrency exchanges. These exchanges were found to be operating illegally and not adhering to India’s anti-money laundering law. The FIU has requested the Ministry of Electronics and Information Technology (MeitY) to block the URLs of these exchanges in India.
The exchanges that received the notice include Binance, Huobi, Kraken, Gate.io, Kucoin, Bitstamp, MEXC Global, Bittrex, and Bitfenex. They were found to be operating illegally within India.
According to the notice, as part of the compliance action against these offshore entities, the FIU India (FIU IND) has issued notices to the virtual digital assets service providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act (PMLA), 2002.
The notice further states that the regulation imposes record reporting and other obligations on the VDA SPs under the 2002 act, which includes registration with the FIU IND. As of now, a total of 31 VDA SPs have completed their registration with FIU IND.
The rule mandates that virtual digital asset service providers, whether operating domestically or internationally, involved in activities such as virtual digital asset transfers, virtual digital asset-to-fiat currency, facilitating control over virtual digital assets, or safekeeping or administration of virtual digital assets, need to register with FIU IND as a ‘Reporting Entity’.
These entities are also required to comply with the requirements stipulated under the PMLA of 2002. However, a significant number of offshore entities, serving a considerable portion of Indian users, avoid registration and thus fall outside the scope of the anti-money laundering (AML) and counter-financing of terrorism (CFT) framework.
FIU India is the primary national agency responsible for receiving, processing, analyzing, and disseminating information related to suspicious financial transactions to foreign financial intelligence units and enforcement agencies.
What Can Indians Do About the Crypto Website Ban or The URLs’ Ban?
If you’re currently trading on an international platform that isn’t registered with the FIU and hasn’t been banned yet, it’s recommended that you transfer your assets to an FIU-registered Indian cryptocurrency exchange.
Given the risks associated with trading on international platforms, the best course of action isn’t to panic and sell your assets. Instead, consider moving them to an Indian exchange or your personal wallet. Once your assets are in your personal wallet, you have the flexibility to swap or sell them as you see fit.
Mudrex, one of the FIU-compliant companies, has seen a surge in their crypto deposits from major exchanges like Binance, amounting to $1 million.
Edul Patel, the CEO and co-founder of Mudrex, stated that the Indian government has always been supportive of innovation and responsible growth within the crypto industry. He emphasized that Indian investors should aim to keep their assets in FIU-compliant entities. This not only provides a localized experience but also offers a legal recourse against any fraudulent activity on their accounts.
Patel further advised that it’s best practice for those using funds on foreign exchanges to aim to repatriate funds back to India.
Crypto Exchanges That Are Not Banned In India
At present, there are 31 cryptocurrency businesses in India that have registered with the Financial Intelligence Unit (FIU). Here are some top exchanges where you might consider transferring your crypto assets:
UnoCoin: As one of India’s oldest and leading exchanges, UnoCoin allows users to buy, sell, and store cryptocurrencies. The platform supports trading in 80 different digital currencies and offers free Bitcoins upon sign-up. Users can also earn 15% of their transaction fees through referrals.
WazirX: Known for its user-friendly interface and advanced trading charts, WazirX is one of the fastest-growing exchanges in India with over six million registered users. The platform, available on Android, web, iOS, and Windows applications, offers a wide range of tradable pairs and coins at competitive prices.
ZebPay: Popular among crypto investors, ZebPay offers interest earnings on idle crypto holdings, providing a guaranteed fixed return of 4% for lending crypto. The exchange currently supports over 100 crypto coins and has around five million registered users.
CoinDCX: CoinDCX is one of the most transparent and safest crypto exchange platforms in India. The onboarding process includes a series of security checks carried out through automated software applications, such as biometrics. They also offer self-custody wallets for their users.
Mudrex: Launched in 2018, Mudrex aims to make cryptocurrency investing long-term and less risky. As one of the earliest exchanges to register with FIU in India, the platform is fully compliant with Indian users. Mudrex has over one million invested users and offers the unique advantage of zero fees on crypto deposits.
CoinSwitch: Ideal for beginners, CoinSwitch allows users to trade more than 100 cryptocurrencies for as low as INR 100 through an easy user interface. They also provide trading pairs of INR to the crypto rupee index, a benchmark index for measuring Indian rupee-based crypto market performance.
