Mumbai: India’s Financial Intelligence Unit has issued show cause notices to nine offshore crypto-currency operators, including Binance, for not complying with the anti-money laundering PML Act.
In a release, the government said the body has issued “compliance Show Cause Notices to nine offshore Virtual Digital Assets Service Providers (VDA SPs)”.
They are: Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
The FIU has written to the Ministry of Electronics and Information Technology to block the URLs of these nine entities as they have been “operating illegally without complying with the provisions of PML Act in India.”
Virtual Digital Assets Service Providers (VDA SPs) were brought into the ambit of Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act, 2002 in March 2023.
“As part of compliance action against the offshore entities, Financial Intelligence Unit India (FIU IND) has issued compliance show cause Notices to following nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA),” FIU said in a release.
“Virtual Digital Asset Service Providers (VDA SPs) operating in India (both offshore and onshore) and engaged in activities like exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets etc. are required to be registered with FIU IND as Reporting Entity and comply with the set of obligations as mandated under Prevention of Money Laundering Act (PMLA) 2002,” the statement read.
It further said the obligation to comply with laws for such entities is based on activity, not on physical presence in India.
“The regulation casts reporting, record keeping, and other obligations on the VDA SPs under the PML Act which also includes registration with the FIU IND,” it added.
It said 31 such entities are registered with India’s Financial Intelligence Unit.
“However, several offshore entities catering to a substantial part of Indian users were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework,” it added.
Binance is one of the biggest global companies in the world’s cryptocurrency space. It was founded by a software developer named Changpeng Zhao in 2017.
