MoF Announces that 28 VDA Service Providers have Registered with the FIU-IND

In a significant development, on December 4, 2023, the Ministry of Finance (“Ministry”) announced that 28 Virtual Digital Assets (VDAs) service providers have registered themselves with the Financial Intelligence Unit-India (FIU-IND). To name a few, the leading crypto-currency exchanges in India such as CoinSwitch, WazirX, Unocoin, Zebpay, Coin DCX, etc. have registered with the FIU-IND to comply with the Prevention of Money Laundering Act (“PMLA”).

By way of background, the Ministry had issued a notification dated March 7, 2023 wherein the VDAs were brought under the umbrella of the PMLA. The notification classified the entities (engaged in the activities pertaining to VDAs) as ‘reporting entities’. The reporting entities are further required to undertake certain compliances inclusive of KYC rules, transaction related due diligence as well as compliance to the PMLA (Maintenance of Record) Rules, 2005.

It is pertinent to mention that the Ministry has further extended the scope of Anti-Money Laundering (AML) and Countering of Financial Terrorism (CFT) guidelines (“AML and CFT guidelines”) to offshore exchanges servicing the Indian market making it a mandatory compliance. Non-compliance will lead to appropriate action against such exchanges.