Key Points:
Read more: India Will Establish Crypto Growth In Coming Months Following G20 Insights
The India warning order, served under the Prevention of Money Laundering Act (PMLA), was issued due to the non-compliance of these exchanges, including Binance, Bittrex, Huobi, and MEXC Global, with regulations aimed at curbing money laundering.
The government has taken steps to block the URLs of these exchanges, which are allegedly operating illegally in India without adhering to PMLA provisions. The FIU, falling under the Finance Ministry, issued show cause notices to the entities, emphasizing that global crypto exchanges must comply with India’s anti-money laundering rules, regardless of their physical presence in the country.
India has been aligning its cryptocurrency regulations with traditional finance norms, mandating companies to collect know-your-customer (KYC) information and register with the FIU. While 31 entities are currently registered, offshore entities catering to Indian users were found operating outside the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) frameworks.
The FIU underscored the importance of compliance with AML and CFT rules, stating that global exchanges cannot evade guidelines simply because they lack a physical presence in India. Cryptocurrencies were brought under the anti-money laundering framework in March, with the government imposing a 30% tax on gains and a 1% deduction on each crypto transaction.
The India warning order comes as some Indian traders shift to global cryptocurrency platforms to potentially evade taxes, prompting stricter regulatory actions. The consequences for the non-compliant exchanges beyond URL blocking remain unclear at this point.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Grand Cayman, Cayman Islands, 23rd May 2024, Chainwire
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