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FIU Sends Notice to 9 Offshore Crypto Platforms and Writes to MeiTY for URL Blocking | Technology news
The Financial Intelligence Unit (FIU) of the Ministry of Finance has issued show-cause notices to nine offshore cryptocurrency and virtual digital asset platforms, such as Binance and Kucoin, for non-compliance with the anti-money laundering law.
The FIU has also written to the Ministry of Electronics and Information Technology to block the URLs of these nine entities which are operating illegally without complying with the provisions of the PML Act in India.
Apart from Binance and Kucoin, the other Virtual Digital Asset Service Providers (VDA SPs) notified for failing to register as reporting entities with the FIU-India are Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfenex.
Virtual digital asset service providers operating in India (both offshore and onshore) and engaged in activities such as trading between virtual digital assets and fiat currencies, transfer of virtual digital assets, custody or administration of virtual digital assets or tools that allow control over virtual digital assets, etc. must be registered with FIU IND as a “reporting entity” and comply with the set of obligations set out in the Prevention of Money Laundering Act (PMLA) 2002.
The obligation is asset based and is not conditional on physical presence in India.
The regulation imposes reporting, record keeping and other obligations under the PML Act on VDA SPs, which also includes registration with the FIU IND, the finance ministry said.
“As part of the compliance action against offshore entities, the Financial Intelligence Unit India (FIU IND) has issued Show Cause compliance notices to the following nine Offshore Virtual Digital Asset Service Providers (VDA SPs) under Section 13 of Prevention of Money Laundering Act, 2002 (PMLA),” the ministry said in a statement.
Under the IT Act, reporting entities are required to file financial transaction returns (SFTs) containing details of certain financial transactions or any reportable accounts maintained by them during the year with the tax department.
In March, the government had brought SP VDAs under the anti-money laundering and countering the financing of terrorism (AML-CFT) framework under the provisions of the PMLA.
To date they have registered with FIU IND 31 SP VDA.
However, several offshore entities that cater to a substantial portion of Indian users have not been registered and fall under the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework, it added.
FIU-IND is the national central agency responsible for receiving, processing, analyzing and disseminating information relating to suspicious financial transactions to law enforcement agencies and foreign FIUs.
First upload on: 12/28/2023 at 10.15pm IST