Crypto Oversight Strengthens in India as 49 Exchanges Register With FIU

Core Insights - India's Financial Intelligence Unit (FIU) has reported that 49 cryptocurrency exchanges have registered under the anti-money laundering framework for the fiscal year 2024-25, indicating enhanced regulatory oversight in the digital asset sector [1][2]. Regulatory Developments - The majority of the registered platforms are domestic, with 45 exchanges operating within India, while four are offshore platforms registered as reporting entities [2]. - In 2023, cryptocurrency exchanges were formally brought under the Prevention of Money Laundering Act (PMLA), requiring them to submit Suspicious Transaction Reports (STRs) and comply with various reporting obligations [3]. Compliance and Enforcement - The FIU's strategic analysis of STRs has identified ongoing risks in the cryptocurrency ecosystem, including the use of digital assets for illegal activities such as hawala operations and fraud schemes [4]. - The report highlighted that the FIU imposed penalties totaling ₹28 crore (approximately $3.1 million) on non-compliant crypto exchanges during the 2024-25 fiscal year, and notices were sent to 25 exchanges for failing to adhere to anti-money laundering rules [6]. Market Activity - Despite regulatory challenges, several major global exchanges, including Bybit, have resumed operations in India after fulfilling local registration requirements and paying penalties [7].