28 Indian Crypto Exchanges Register With India’s AML Department

Table of Contents

• Entities Complying with AML Regulations
• Regulatory Framework and KYC Requirements
• International Compliance for Offshore Exchanges
• Taxation Woes and Market Impact

A total of 28 crypto entities, including CoinDCX, WazirX, Coinswitch, and ZebPay, have registered with the Financial Intelligence Unit-India (FIU-IND)

Entities Complying with AML Regulations

In a recent development, 28 entities providing services related to virtual digital assets (VDAs) in India have registered with the Financial Intelligence Unit-India (FIU-IND). 

According to the Indian Minister of State for Finance, Pankaj Chaudhary, prominent players like Neblio Technologies (CoinDCX), Zanmai Labs (WazirX), Bitcipher Labs (Coinswitch), Nextgendev Solutions (CoinswitchX), and Awlencan Innovations India (Zebpay) have officially registered with FIU-IND. 

This move comes in response to the government's notification earlier this year, declaring companies dealing in VDAs, crypto exchanges, and related intermediaries as 'reporting entities' under the Prevention of Money Laundering Act (PMLA).

Regulatory Framework and KYC Requirements

In March, the government mandated that crypto exchanges and their intermediaries must perform Know Your Customer (KYC) processes for their clients and platform users. As reporting entities under the PMLA, these crypto exchanges and VDA companies are obligated to maintain detailed KYC records, including identity documents, account files, and business correspondence with their clients. This aligns with the broader regulatory efforts to curb money laundering and illicit activities in the crypto space.

International Compliance for Offshore Exchanges

The regulatory framework extends to offshore crypto exchanges operating in India, as Minister Pankaj Chaudhary affirmed, stating, 

"The guidelines and reporting requirements are applicable to offshore crypto exchanges servicing the Indian market. The process of registration for the said VDA service providers has been initiated. " 

Notably, non-compliance by foreign platforms may trigger appropriate action under the PMLA, emphasizing the government's commitment to enforcing regulatory standards.

Taxation Woes and Market Impact

India, echoing the views of international bodies such as the International Monetary Fund (IMF) and the Financial Stability Board (FSB), advocates for coordinated global crypto regulations. This aligns with India's recent commentary on the ideal approach to crypto regulation, emphasizing the need for a unified stance among G20 nations.

However, these regulatory measures coincide with challenges in the taxation domain. The Indian government's decision to impose a 1% tax deducted at source (TDS) on crypto transactions exceeding INR 10,000, coupled with a 30% tax on profits from these transactions, has sent ripples through the crypto trade in India. This taxation stance has been met with strong criticism, and coupled with negative sentiments expressed by top officials of the Reserve Bank of India (RBI), it has adversely affected the Indian crypto market.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.