Binance, 8 other crypto platforms to be blocked in India
On Thursday, India issued show cause notices to nine offshore cryptocurrency trading platforms, including Binance, Kucoin, and Huobi. Additionally, steps are being taken to block their web addresses, alleging their unauthorized operations within the country.
Under money laundering laws, the Financial Intelligence Unit India (FIU IND) issued notices. These virtual digit asset (VDA) service providers, including Binance and others, failed to adhere to anti-money laundering provisions, as stated by the finance ministry in a late-night statement.
In March 2023, the service providers were incorporated into the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework as outlined in the Prevention of Money Laundering Act (PML) Act, according to the ministry.
Issued under a section of the Prevention of Money Laundering Act, these notices empower the government to levy penalties on the entity, its directors, or employees, or issue warnings and instructions.
India is presently undergoing a peer review of its anti-money laundering and counter-financing of terrorism framework by the Financial Action Task Force (FATF), a UN entity. This evaluation examines both the technical compliance with FATF recommendations and the efficacy of India’s framework for combating money laundering and terrorist financing.
The Director of FIU IND has communicated with the Secretary of the Ministry of Electronics and Information Technology, urging the blocking of URLs belonging to entities accused of illegal operations in India and non-compliance with the provisions of the PML Act, as per the statement.
According to the ministry, crypto platforms must register with FIU IND as reporting entities and fulfill specified legal obligations. The statement highlights that these service providers are subject to regulations that impose reporting, record-keeping, and other obligations under the law.
As of now, 31 VDA service providers have completed registration with FIU IND. Nevertheless, the statement notes that numerous offshore entities, despite serving a significant portion of Indian users, have not undergone the registration process.