Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp among 9 offshore crypto cos banned by FinMin

Financial Intelligence Unit, India (FIU-IND) – the national co-ordinating agency against money laundering, and terror financing – has recommended blocking the URLs of nine crypto entities, including Binance on the grounds of non compliance to the provisions of the Prevention of Money Laundering Act (PMLA). Apart from Binance, the other eight entities are – KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, Bitfinex.

FIU IND has written to the Ministry of Electronics and Information Technology to block URLs of the nine entities operating illegally without complying with the provisions of PML Act in India, while at the same time issuing compliance show cause notices to the offshore Virtual Digital Assets Service Providers (VDA-SPs).

"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," the finance ministry says in a release.

"As part of compliance action against the offshore entities, FIU IND has issued compliance show cause notices to nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA)," the release says.

"FIU IND has written to secretary, ministry of electronics and information technology to block the URLs of said entities that are operating illegally without complying with the provisions of the PML Act in India," says the ministry.

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 ministry says. "The obligation is activity-based and is not contingent 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 adds.

"Till date 31 VDA SPs have registered with FIU IND. 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 says.