The cryptocurrency landscape in India is stepping into a new era of regulatory oversight. As of the fiscal year 2024–25, a total of 49 cryptocurrency exchanges have officially registered under India’s Financial Intelligence Unit (FIU) as part of the country’s anti-money laundering (AML) compliance framework. This significant move not only ensures accountability but also strengthens the overall trust in India’s burgeoning digital asset sector.
What This Means for the Indian Crypto Market
Out of the 49 platforms that have gained registration, 45 are domestic, showcasing India’s rapidly growing local crypto ecosystem. The remaining four are offshore exchanges that have received approval to operate within Indian regulations, demonstrating that India’s influence extends beyond its borders. With the crypto industry legally classified under Virtual Digital Assets (VDAs), these platforms must adhere to strict obligations imposed under the Prevention of Money Laundering Act (PMLA).
Key Requirements for VDA Service Providers
As designated reporting entities, VDA Service Providers (VDA SPs) are required to meet several compliance obligations, including:
- Identifying and reporting suspicious transactions through Suspicious Transaction Reports (STRs).
- Monitoring fundraising activities such as token and initial coin offerings (ICOs).
- Institutionalizing measures to track transactions between hosted and unhosted wallets, particularly those involving cross-border transfers.
- Ensuring identification of beneficial ownership of cryptocurrencies.
In 2023, the FIU highlighted that such measures are vital to mitigate potential risks, which include money laundering, hawala operations, illegal gambling, and fraud cases.
Challenges Continue Despite Progress
While the Indian crypto sector is making strides toward compliance and transparency, challenges remain. The FIU’s 2024–25 report identified persistent risks, noting the potential misuse of VDAs for anonymity, obfuscation of transaction flows, and other illicit activities.
To address these issues, the FIU imposed approximately ₹28 crore (around $3.1 million) in penalties on non-compliant exchanges, with further notices sent to 25 platforms, including well-known names like BingX, LBank, CoinW, CEX.IO, and Poloniex, for failing to meet compliance standards. Regulators remain committed to creating a safer and more transparent ecosystem for consumers and businesses alike.
Big Players Return to India
Among the global players navigating India’s updated regulations, exchanges like Bybit and Binance have resumed operations after meeting local compliance requirements. Bybit re-entered the market by paying a $1 million penalty for its registration, while Binance shelled out $2.2 million. Coinbase has also resumed user onboarding and is planning an introduction of fiat on-ramp services in 2026, signaling continued commitment to the Indian market.
Safeguarding Against Fraud
India’s regulators are also ramping up efforts to combat crypto-related scams. Notable enforcement actions have dismantled fraudulent operations, including decade-long Ponzi schemes that preyed on investor trust. Such moves underline the government’s commitment to fostering a safe digital financial ecosystem.
Enhancing Your Crypto Experience
For crypto enthusiasts looking to ensure secure transactions, consider using hardware wallets like the Ledger Nano X for enhanced security. This wallet offers private key protection, Bluetooth connectivity for convenience, and robust support for multiple assets, making it an essential tool for managing your digital wealth responsibly.
As India solidifies its stance on cryptocurrency regulations, the landscape is poised for both innovation and security. While challenges remain, the integration of global and local efforts is paving the way for a more robust and transparent market.
