Financial Intelligence Unit issues compliance notices to 15 crypto service providers

The Financial Intelligence Unit-India (FIU-IND) on Wednesday issued compliance notices to 15 Virtual Digital Asset Service Providers (VDA SPs) for allegedly failing to comply with provisions of the Prevention of Money Laundering Act, 2002 (PMLA). 

The notices have been issued by the Director, FIU-IND, under Section 13 of the PMLA. The entities named in the action are Weex International Exchange Ltd, BLF Global Ltd, RezorEx, Bitunix LLC, DigiFinex Ltd, Hopeful Technology Co. Ltd, Fibtc Ltd/XT TECHNICAL PTE. Ltd, LAtrade Ltd, Wootech Ltd, Marketa Trading Inc, CHN Group LLC, SimpleSwap Ltd, FFGX Group LLC, UAB Clear White Technologies and FinSeven CZ. 

FIU-IND directs takedown of applications and URLs 

In a separate action, the Director, FIU-IND, acting as the nodal officer under Section 79(3)(b) of the Information Technology Act, 2000, read with Rule 3(1)(d) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2025, has issued notices concerning the same entities. 

The notices direct the takedown of applications and URLs providing public access to the services, which FIU-IND has found to be operating illegally without complying with the applicable provisions of the PMLA in India. 

When did crypto service providers come under the anti-money laundering framework? 

Virtual Digital Asset Service Providers were brought within the ambit of India's Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework under the PMLA in March 2023. 

Under the framework, VDA SPs operating in India are required to register with FIU-IND as reporting entities and comply with obligations prescribed under the PMLA and the rules framed under it. 

Do offshore crypto firms also have to register with FIU-IND? 

Yes. The compliance requirements apply to VDA SPs operating in India, irrespective of whether they are based offshore or onshore. 

Entities involved in activities such as exchanging virtual digital assets for fiat currencies, transferring virtual digital assets, providing custody or administration of virtual digital assets, or offering instruments that enable control over virtual digital assets are required to comply with the AML/CFT framework. 

These obligations are activity-based and are not dependent on whether a VDA SP has a physical presence in India. 

The PMLA framework imposes reporting, record-keeping and other compliance obligations on VDA SPs. Registration with FIU-IND is also part of these requirements. Entities covered by the framework are expected to comply with the prescribed AML/CFT requirements while carrying out activities involving virtual digital assets in India. 

What has FIU-IND cautioned crypto investors about? 

FIU-IND has also issued a public safety and awareness warning, stating that crypto products and non-fungible tokens (NFTs) are unregulated and can carry major risks. 

It cautioned that there may be no regulatory recourse for losses arising from such transactions, noting the risks for members of the public engaging with virtual digital asset platforms and products.