India has further tightened its supervision of cryptocurrencies. A new report from the Financial Intelligence Unit (FIU) shows that digital currencies are increasingly being used for serious criminal activities. In the fiscal year 2024–2025, the regulator registered a total of 49 crypto exchanges, the majority of which are based in India.
The registration officially brings these platforms under Indian anti-money laundering laws. This should prevent cryptocurrencies from being used for money laundering, fraud and the financing of terrorism.
Cryptocurrency increasingly linked to crime
According to the FIU, cryptocurrency is no longer just an investment tool. An analysis of suspicious transactions shows that digital currencies have been used for scams, fraud, illegal gambling and so-called hawala transactions, where money is moved outside the regular banking system.
In addition, some transactions have been linked to serious crimes, including child pornography, terrorist financing, illegal services on the dark web and criminal money laundering. The regulator speaks of an increasing exploitation of cryptocurrencies for serious crime.
India opts for one central supervisor
Unlike many other countries, India has opted for one central body that oversees crypto exchanges. The FIU, which falls under the Ministry of Finance, is responsible for the registration and control of so-called Virtual Digital Asset Service Providers, such as crypto exchanges.
Since 2023, these platforms have been subject to the Prevention of Money Laundering Act. This means that they are obliged to report suspicious transactions and actively cooperate in supervision and investigation.
Strict obligations for crypto platforms
The rules for crypto exchanges are extensive. Platforms must identify who is behind digital wallets, track transactions between different types of wallets and closely monitor crypto projects that raise money through tokens. Internal audits, risk assessments and stricter customer checks are also mandatory.
Exchanges that do not comply with the rules risk significant sanctions. In the last fiscal year, the FIU imposed fines worth Rs 28 crore on platforms that violated the law.
Growing crypto market, but with clear risks
According to the report, the crypto market in India has grown rapidly in recent years. Digital assets are attracting a lot of attention due to their potential to innovate the financial sector and provide new investment opportunities.
At the same time, the FIU warns about the risks. The international nature, fast transactions and limited visibility of money flows make cryptocurrencies attractive for abuse. To limit these risks, India has, in addition to strict supervision, also introduced tax measures, such as tax on profits from crypto trading and withholding tax on transactions.
With this combination of regulation and supervision, India wants to enable innovation, without losing sight of the security of the financial system.
Source: https://newsbit.nl/india-verscherpt-toezicht-op-cryptobeurzen-na-signalen-van-fraude-en-terrorismefinanciering/
