India’s Ministry of Finance has issued compliance show cause notices to Binance and 8 other offshore exchanges for operating without following anti-money laundering policies. The notices were sent out by India’s Financial Intelligence Unit (FIU). The decision to take action against Binance and other foreign exchanges adheres to the Prevention of Money Laundering Act (PMLA).
In March, the Ministry of Finance made it mandatory for crypto businesses to register with the FIU and comply with PMLA regulations. As of Dec. 4, 28 cryptocurrency firms had registered with the national anti-money laundering agency, as reported by crypto.news.
The FIU stated that this regulation is activity-based and does not depend on physical presence in India. They further noted that the PML Act requires VDA SPs to report, maintain records, and register with the FIU IND.
Cryptocurrency is a controversial topic in India, with regulators divided on how to view the industry. Finance Minister Nirmala Sitharaman has asked for international cooperation in creating a comprehensive framework for crypto and to consider the advantages of blockchain. In contrast, the Reserve Bank of India is in favour of a complete ban on virtual currencies.
