Centre asked to block access to 9 crypto exchanges

The Financial Intelligence Unit-India (FIU-IND) has asked the Indian government to block access to nine overseas cryptocurrency exchanges.

The central agency Financial Intelligence Unit-India (FIU-IND) has issued notices and asked the Union government to block access to nine overseas cryptocurrency exchanges, including Binance, Bittrex, Huobi and MEXC Global, an official statement said on Thursday, citing non-compliance of rules meant to check money laundering.

VDA SPs is a classification for cryptocurrency exchanges, which allow people to store, buy or sell cryptocurrencies such as Bitcoin and Ether.(Representational image)

“Financial Intelligence Unit India (FIU IND) has issued compliance Show Cause Notices to following nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA),” statement released by the finance ministry said.

FIU-IND reports directly to the Economic Intelligence Council (EIC) headed by Union finance minister. “Director FIU IND has written to secretary, ministry of electronics and information technology [MeitY] to block the URLs of said entities that are operating illegally without complying with the provisions of the PML Act in India,” the statement said.

VDA SPs is a classification for cryptocurrency exchanges, which allow people to store, buy or sell cryptocurrencies such as Bitcoin and Ether. Cryptocurrencies have been a persistent cause of concern since they are not regulated, and officials and regulators in multiple countries see them as a threat to financial stability.

“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 PML Act which also includes registration with the FIU IND,” the statement said, elaborating on the obligations that were needed to be carried out by the exchanges.

Till date 31 VDA SPs have registered with FIU IND. However, several offshore entities catering to a substantial part of Indian users were not registering with the agency.

According to the statement the nine entities are – Binance with addresses linked to tax heavens like Seychelles and Cayman Islands; Kucoin linked from Seychelles and Singapore; Huobi (Hong Kong and Singapore); Kraken (British Virgin Islands); Gate.io (Cayman Islands); Bittrex (United States); Bitstamp (Luxembourg, London, British Virgin Islands and New York); MEXC Global (Singapore and Seychelles); and Bitfinex (British Virgin Islands).