15 Virtual Digital Asset Service Providers Face FIU-IND Notices for PMLA Non-Compliance

The Financial Intelligence Unit-India (FIU-IND) has issued notices to 15 Virtual Digital Asset Service Providers (VDA SPs) for failing to comply with provisions of the Prevention of Money Laundering Act (PMLA), 2002, the Ministry of Finance said on Wednesday. The notices have been issued under Section 13 of the PMLA to platforms including Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, FixedFloat, WhiteBIT and Guardian. The FIU-IND has also directed that the applications and URLs associated with these entities be removed from public access. According to the Finance Ministry, the platforms were operating in India without meeting the mandatory requirements under the country's anti-money laundering law.

Virtual Digital Asset Service Providers were brought under India's anti-money laundering and counter-financing of terrorism framework in March 2023 through the PMLA. The rules apply to both domestic and overseas VDA service providers conducting covered activities in India. These activities include exchanging virtual digital assets for fiat currencies, transferring digital assets, providing custody or administration services, and offering services that enable users to control such assets.

Under the framework, VDA service providers carrying out these activities are required to register with the FIU-IND as reporting entities and follow the obligations prescribed under the PMLA and related rules. The Finance Ministry clarified that these requirements are based on the nature of activities carried out by a service provider and apply regardless of whether the company has a physical presence in India.

The regulations require registered VDA service providers to maintain appropriate records, report specified transactions and comply with other anti-money laundering requirements. The latest action reflects the government's continued efforts to ensure that digital asset platforms serving Indian users operate within the country's financial compliance framework.

The Finance Ministry also issued a public safety warning about cryptocurrencies and non-fungible tokens (NFTs), stating that these products remain unregulated and can carry significant financial risks. It cautioned users that there may be limited or no regulatory recourse available for losses resulting from transactions involving such assets.

Disclaimer: This image is taken from ANI.