India May Block Binance for Illegal Operation
28 Dec, 2023 ● Crypto News
Nine international virtual asset service providers received compliance notices from India's Financial Intelligence Unit for allegedly engaging in illicit activities and breaking anti-money laundering laws.
Global cryptocurrency exchanges Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex are a few of the companies offering cryptocurrency services.
The unit asked the Ministry of Electronics and Information Technology to block the companies' URLs, presumably to stop people from accessing their websites within the nation, according to a press release dated December 28.
Thirty-one VDA SPs have registered with FIU IND thus far. Nevertheless, the document states that despite serving a sizable portion of Indian users, a number of offshore entities were failing to register and fall under the purview of the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) frameworks.
Whether headquartered in India or abroad, digital asset providers doing business in the nation must adhere to strict regulatory standards, like registering as a "Reporting Entity" with the Financial Intelligence Unit.
They have to abide by the rules specified in the Prevention of Money Laundering Act (PMLA) 2002 after registering. This act establishes a number of requirements, such as Know Your Customer (KYC) policies for client onboarding, that are intended to stop money laundering activities.
India became the second-largest market globally by raw estimated transaction volume, behind the United States, after being ranked as the top country in Chainalysis' global crypto adoption index of 2022.
The increasing popularity of cryptocurrencies has led Indian regulators to intervene. The nation is developing a cryptocurrency regulatory framework based on the Financial Stability Board's and the International Monetary Fund's joint recommendations.
Anticipated for release in 2024, the framework is expected to incorporate sophisticated KYC regulations for cryptocurrency enterprises and mandate the dissemination of real-time proof-of-reserve audits.
Additionally, it is anticipated to suggest a tax policy that is consistent across countries and give cryptocurrency exchanges the same legal standing as authorized dealers—much like banks—under Reserve Bank of India regulations.
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