u.today
India's Financial Intelligence Unit (FIU) has issued Show Cause Notices to nine major offshore virtual digital assets service providers (VDA SPs), including industry giants like Binance and Huobi. This significant step could have a significant impact on the local crypto scene.
A regulatory crackdown
This measure is part of India's enforcement of its AML-CFT framework, which was extended to VDA SPs in March 2023.
The nine targeted entities, operating with significant user bases in India, have been operating without registering as mandated by the PML Act.
The FIU's notices demand that these exchanges to explain their non-compliance. Otherwise, their websites could be blocked in India, effectively cutting off a significant portion of their user base.
India's evolving stance on
India's relationship with cryptocurrency has been a rollercoaster ride, characterized by shifting policies and regulatory uncertainties.
The country previously considered an outright ban on cryptocurrencies, notably when the Reserve Bank of India (RBI) prohibited banks from dealing with crypto businesses in 2018. This ban was later overturned by the Supreme Court in 2020, leading to a period of regulatory ambiguity.
However, recent developments at the G-20 summit, where India pressed for crypto rules, signal a move towards a more nuanced approach.
The country is now working on a five-point crypto legislative framework that is influenced by recommendations from the IMF and the FSB. This framework suggests a future where Indian crypto platforms could operate under guidelines akin to those for authorized dealers.