The Financial Intelligence Unit-India (FIU-IND) has initiated compliance action against 15 Virtual Digital Assets Service Providers (VDA SPs) for alleged violations of anti-money laundering regulations.
The financial crime watchdog has issued notices to these entities under Section 13 of the Prevention of Money Laundering Act (PMLA) and directed them to remove their applications and website URLs from public access for operating without meeting regulatory requirements.
VDA SPs involved in activities such as exchange of virtual digital assets and fiat currencies, transfer of digital assets and related services are required to register with FIU-IND as reporting entities.
The registration and compliance obligations apply to both domestic and overseas entities providing services to users in India. These requirements are based on the nature of activities conducted and do not depend on whether the company has a physical presence in the country.
The finance ministry said the action was taken against entities that failed to meet their obligations under the anti-money laundering framework. The firms named in the notices include Weex International Exchange, BLF Global, Bitunix LLC, DigiFinex Ltd and FinSeven CZ.
"The Director, FIU-IND ... has also issued notices with respect to the ... entities to take down the application/URLs for public access which have been found to be operating illegally without complying with the relevant provisions of the PMLA in India," the ministry said.
Govt warns investors about crypto risks
Virtual Digital Assets Service Providers were brought under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework under the PMLA in March 2023.
The government has been tightening oversight of cryptocurrency-related activities to ensure compliance with financial crime prevention rules and improve transparency in the sector.
For investor awareness, the ministry reiterated the risks associated with digital assets, stating, "Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions."
The latest action highlights the government’s focus on ensuring that crypto service providers operating in India follow mandatory reporting and compliance standards.
