Nine offshore cryptocurrency platforms have received show-cause warnings from India’s Financial Intelligence Unit (FIU), which is under the Ministry of Finance’s jurisdiction, in accordance with the strict Prevention of Money Laundering Act (PMLA). The show-cause notice has been delivered to prominent virtual asset marketplaces such as Kucoin and Binance. The news agency PTI stated on Thursday that notifications are being given for breaking the laws against money laundering.
In accordance with PMLA regulations, the FIU has also written to the Ministry of Electronics and Information Technology, requesting that their URL be blocked because their activities in India are unlawful.
Notices have been served to nine cryptocurrency exchanges: Bitfinex, MEXC Global, Bittrex, Bitstamp, Huobi, Gate.io, Binance, and KuCoin. The Federal Bureau of Investigation has confirmed that the PMLA provisions’ compliance mandate is activity-based and does not necessitate a physical presence in India.
“The following nine offshore Virtual Digital Assets Service Providers (VDA SPs) have been issued compliance Show Cause Notices under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA),” the ministry said in a statement. “This is part of action taken against offshore entities for not following the rules.”
‘Reporting Entity’ registration is required
Digital asset service providers must register as a “reporting entity” with the Financial Intelligence Unit India (FIU IND) in order to conduct business, whether they are based in India or not. These providers must also be involved in activities like transferring and converting between digital assets and traditional currencies, protecting or managing digital assets, and using instruments that grant control over digital assets. Furthermore, they must comply with a particular set of duties delineated in the Prevention of Money Laundering Act (PMLA) of 2002.
Additionally, the “reporting entity” is required to provide statements of financial transactions (SFT) to the Income Tax department, which must reveal any reportable accounts they maintained during the year as well as specific financial transactions.
Read About – What Is Cryptocurrency?
From being against regulation: Does India’s attitude toward cryptocurrencies fluctuate? This is what a specialist says.
In March of this year, the government made the decision to include virtual digital asset service providers under the Anti-Money Laundering/Counter Financing of Terrorism (AML-CFT) framework. As of right now, 31 VDA SPs have registered with the Federal Bureau of Investigation.
