New Delhi: India issued show cause notices on Thursday to nine offshore cryptocurrency trading platforms, including Binance, Kucoin, and Huobi. The government has taken steps to block their web addresses, alleging that these platforms are operating illegally in the country.
The Financial Intelligence Unit India (FIU IND) issued show cause notices under money laundering laws to nine virtual digit asset (VDA) service providers, including Binance, Kucoin, and Huobi. The finance ministry stated that these companies failed to comply with the provisions of anti-money laundering laws.
Queries emailed to Binance, Kucoin and Huobi on Thursday seeking comments remained unanswered.
These service providers were brought under the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023, the ministry said.
The notices were issued under a section of the Prevention of Money Laundering Act that authorizes the government to impose a penalty on the entity, its directors or employees or issue a warning or instructions.
#MarketsWithMC: भारतीय वित्त मंत्रालय ने क्रिप्टो एक्सचेंज ऑपरेटर Binance समेत 9 ऑफशोर वर्चुअल डिजिटल एसेट्स सर्विस प्रोवाइडर्स को कारण बताओ नोटिस भेजा है। https://t.co/0urFAt2QuY#url #Binance #CryptoNews #NirmalaSitharaman #crypto #moneycontrol pic.twitter.com/9UgEzJtV96
— Moneycontrol Hindi (@MoneycontrolH) December 29, 2023
India is currently undergoing a peer review of its anti-money laundering and counter financing of terrorism framework by the Financial Action Task Force (FATF), a UN body. The review assesses both the technical compliance of its recommendations and the effectiveness of India’s anti-money laundering and anti-terror financing framework.
Director FIU IND has written to secretary, Ministry of Electronics and Information Technology to block the URLs of these entities allegedly operating illegally without complying with the provisions of the PML Act in India, the statement said.
Crypto platforms are required to be registered with FIU IND as reporting entities and comply with certain obligations as mandated law, the ministry said. Regulations cast reporting, record keeping and other obligations on these service providers under the law, the statement said.
Till date, 31 VDA service providers have registered with FIU IND. However, several offshore entities though catering to a substantial part of Indian users were not getting registered, the statement said.