India Flags 15 Offshore Crypto Platforms for Money Laundering Violations
Financial watchdog issues notices to offshore crypto operators
India’s Financial Intelligence Unit (FIU-IND) has issued non-compliance notices to 15 offshore cryptocurrency platforms. The government agency accused these virtual digital asset service providers of serving Indian customers without registering under the country’s anti-money laundering rules.
The FIU-IND named the following 15 platforms as violators: Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT, and Guardarian. Most of these are considered small or medium-sized operators.
India’s strict anti-money laundering requirements
In March 2023, India brought crypto platforms under the same anti-money laundering rules that banks follow. Under these regulations, any platform targeting Indian users must register with the FIU-IND, regardless of whether it has a physical office in India. Registered platforms are required to verify the identity of their users, maintain detailed records, and report any suspicious financial activity to the government.
The reported use of crypto gift cards
This latest enforcement action follows reports that some Indian users are moving stablecoins to overseas platforms. Stablecoins are digital tokens designed to stay at a steady value, often pegged to the U.S. dollar. According to reports, users convert these tokens into gift cards to pay for daily expenses like fuel, gold, and groceries. This method allows users to spend money without using local Indian exchanges or being monitored by authorities.
Warnings and previous enforcement actions
The FIU-IND issued a public caution stating that crypto products and non-fungible tokens (NFTs) are unregulated and highly risky. NFTs are unique digital assets that represent ownership of items like art or collectibles. The agency warned that there may be no legal way to recover funds if a person loses money in these transactions.
This move is part of an ongoing crackdown that began in December 2023, when the FIU-IND targeted nine major offshore exchanges, including Binance and Kraken. Binance later registered with the unit and paid a penalty of 18.82 crore rupees for violating money laundering rules.
