Govt issues notices to 25 offshore crypto assets cos for non-compliance of money laundering law

The government has also instructed these entities to take down their applications/websites from public access in India | Photo Credit: hocus-focus

Financial Intelligence Unit-India (FIU-India) has notified 25 overseas virtual digital asset service providers, including British Virgin Islands-based crypto platforms LBank and BingX, for non-compliance with India’s anti-money laundering regulations. These platforms rank among the world’s top 20 cryptocurrency exchanges.

These entities have also been directed by the government to remove their applications and websites from public availability in India, according to a finance ministry statement released on Wednesday.

This enforcement follows the government’s 2023 decision to extend Prevention of Money Laundering Act (PMLA) provisions to virtual digital asset service providers.

The ministry cautioned investors, stating: “Cryptocurrency products and NFTs remain unregulated with significant risks. Investors should be aware that financial losses from such transactions may not have any legal recourse.”

Currently, 50 virtual digital asset service providers (VDA SPs) have registered with FIU-India, complying with the nation’s anti-money laundering framework.

The ministry clarified that the registration process requires both offshore and domestic VDA SPs to follow the same regulatory requirements. This includes entities facilitating cryptocurrency transactions through Indian users, regardless of their physical presence in India.

Financial authorities have mandated these VDA SPs to register as reporting entities with FIU-India and fulfill their compliance obligations under the PMLA 2002. These include maintaining detailed records, reporting suspicious transactions, and implementing robust Know Your Customer (KYC) protocols.

Published on October 2, 2025