India’s finance ministry has pulled up nine offshore virtual digital assets service providers, including Binance Kraken and Huobi, over non-compliance with Indian anti-money laundering laws.
The financial intelligence wing of the ministry has written to the ministry of electronics and information technology to block the uniform resource locators (URLs) of the nine entities Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
The Financial Intelligence Unit India (FIU-IND) said the nine entities are “operating illegally without complying with the provisions of the Prevention of Money Laundering Act (PMLA) in India,” while adding that the service providers need to be registered in India irrespective of their physical location.
The ban will affect millions of people in India who trade cryptos through these platforms.
“Virtual digital asset service providers (VDA SPs) operating in India (both offshore and onshore) and engaged in activities like exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets, etc., are required to be registered with FIU-IND as reporting entity and comply with the set of obligations as mandated under the PMLA,” the ministry of finance said in a press release.
“The obligation is activity-based and is not contingent on physical presence in India. The regulation casts reporting, record keeping, and other obligations on the VDA SPs under the PMLA which also includes registration with the FIU-IND,” it added.
Virtual digital asset service providers were brought into the ambit of anti money laundering and counter financing of terrorism framework under the provisions of the PMLA. FIU-IND said 31 virtual digital asset service providers have registered with it but several offshore entities were not getting registered despite coming under the framework.
FIU-IND is India’s central, national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions to enforcement agencies and foreign financial intelligence units.
Binance, the world’s largest cryptocurrency exchange, is facing a battery of troubles worldwide, including accusations of facilitating illicit transactions and evading taxes. Its founder and former chief executive, Changpen Zhao, stepped down this year and pleaded guilty to breaking US anti-money laundering laws as part of a $4.3 billion settlement.