India Tightens Oversight of the Crypto Sector in 2024-2025
India has ramped up its efforts to regulate the cryptocurrency sector, as financial enforcement agencies intensify scrutiny over crypto-related activities. This regulatory push not only aims to address increasing financial crime risks but also promotes transparency and compliance in a rapidly growing industry.
FIU’s Role: The Central Authority for Crypto Monitoring
As of the fiscal year 2024-2025, 49 cryptocurrency exchanges have formally registered with India’s Financial Intelligence Unit (FIU), solidifying the FIU’s role as the primary authority overseeing cryptocurrency activities.
Industry experts recognize this regulatory shift as a crucial step forward in protecting consumers, businesses, and the financial ecosystem.
Key Compliance Measures for Exchanges
Under the Prevention of Money Laundering Act (PMLA), cryptocurrency exchanges in India, now categorized as Virtual Digital Asset Service Providers, are mandated to follow stringent protocols:
- Submission of Suspicious Transaction Reports (STRs)
- Conducting audit-backed risk assessments
- Identifying wallet owners and scrutinizing transactions against government monitoring standards
- Regular risk evaluations tied to sanctions lists
These measures are critical in reducing the misuse of digital assets for scams, fraud, and more serious offenses such as terror financing.
Fines for Non-Compliance and Regional Monitoring
During FY 2024-2025, crypto platforms unable to meet obligations faced fines totaling ₹28 crore. Furthermore, authorities have begun mapping transaction hotspots, identifying high-risk locations, and tracking digital assets often associated with illicit activity.
Domestic Crypto Market: A Landscape of Opportunity
Contrary to common perceptions, India’s crypto market is emerging as a competitive hub, with multiple platforms innovating and vying for liquidity. Industry leaders believe that consistent regulatory clarity will foster innovation while safeguarding economic integrity.
What Does This Mean for Crypto Users?
Changes in India’s regulatory framework mean that users can expect more transparency, better security of funds, and stricter standards among cryptocurrency exchanges. Compliance protocols are focused on offering users a secure trading environment while combating misuse in the form of scams and fraud.
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