New Delhi, Oct 2 (IANS) The Financial Intelligence Unit of India (FIU-IND) has sent notices to 25 offshore virtual digital asset (VDA) service providers for allegedly failing to follow India’s anti-money laundering laws, according to a Finance Ministry statement.
The notices were issued under Section 13 of the Prevention of Money Laundering Act (PMLA).
This section allows authorities to launch investigations, check company records, verify customer details, and demand reports on suspicious transactions.
Companies that violate the rules could face fines of up to Rs 1 lakh for each breach.
Among the 25 offshore firms served notices are CoinW of Singapore, BTCC of the UK, Changelly of Hong Kong, and Paxful of the US.
Other names include Huione of Cambodia, CEX.IO of the US and the UK, LBank of the British Virgin Islands, PrimeXBT of Saint Lucia, Coinex of Hong Kong, Remitano of Singapore, Poloniex of Boston, BitMex of Seychelles, and LCX of Liechtenstein.
The FIU-IND has also issued separate notices under the Information Technology Act, 2000, asking for the removal of apps and websites that were operating in India without proper registration under PMLA.
FIU-India, which was set up in 2004, is the main agency responsible for collecting and analyzing information about suspicious financial transactions.
So far, 50 VDA service providers have registered with FIU-IND. However, several offshore firms continue to operate in India without registering, which keeps them outside the anti-money laundering and counter-financing of terrorism (AML-CFT) framework.
The government made it clear that all VDA service providers serving Indian users -- whether based in India or abroad -- must register with FIU-IND and follow PMLA rules.
These rules apply to companies engaged in activities like crypto-to-fiat exchanges, transfer of virtual assets, safekeeping of digital assets, or any services giving control over such assets.
Registration and compliance are mandatory even if the companies do not have a physical presence in India.
The Finance Ministry also warned users that crypto products and non-fungible tokens (NFTs) are currently unregulated and carry high risks.
It said there is no regulatory protection if investors suffer losses from such transactions.
--IANS
pk
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