In a significant development, the Finance Ministry has disclosed that 28 Virtual Digital Assets (VDA) service providers, including industry players such as WazirX, CoinDCX, and CoinSwitch, have officially registered with the Financial Intelligence Unit-India (FIU-IND). The Finance Ministry’s announcement follows its earlier directive in March, designating entities involved in Virtual Digital Assets, crypto exchanges, and intermediaries as “reporting entities” under the Prevention of Money Laundering Act (PMLA).
In accordance with these regulations, crypto exchanges and intermediaries dealing with Virtual Digital Assets are mandated to conduct Know Your Customer (KYC) procedures for their clients and platform users. Responding to inquiries about whether these guidelines extend to Offshore Crypto Exchanges catering to the Indian market, Minister of State for Finance Pankaj Chaudhary affirmed that the rules and reporting requirements do apply to such offshore exchanges. He stated, “The guidelines and reporting requirements apply to offshore crypto exchanges servicing the Indian Market. The process of registration for the said VDA service providers has been initiated.”
Moreover, Chaudhary emphasized that appropriate action under the Prevention of Money Laundering Act would be initiated in cases of non-compliance by offshore platforms. As of now, 28 entities have completed the registration process to offer services related to Virtual Digital Assets. Notable among these are Neblio Technologies Pvt Ltd, operating the trading platform Coin DCX; Zanmai Labs Pvt Ltd (WazirX); Bitcipher Labs LLP (Coinswitch); Nextgendev Solutions Pvt Ltd (CoinswitchX); and Awlencan Innovations India Ltd (Zebpay).
Under the anti-money laundering law, reporting entities are obligated to maintain comprehensive records, including KYC details, documents verifying the identity of clients and beneficial owners, as well as account files and business correspondence pertaining to their clients. This move signals a proactive approach by regulatory authorities in addressing the evolving landscape of digital assets and ensuring adherence to anti-money laundering measures within the cryptocurrency sector.
