If you are also interested in crypto business while living in India and have an account on any crypto exchange, then get your KYC (Know Your Customer) updated immediately. The Financial Intelligence Unit of the Government of India (FIU-IND) has instructed cryptocurrency exchanges to update and strengthen their KYC process by June 30, 2025. Let us tell you that FIU-IND has given this order under the Prevention of Money Laundering Act (PMLA).
Financial Intelligence Unit-India (FIU) has said that crypto exchanges will have to update the data of all users whose account information is older than 18 months. They will have to start the KYC process again. Along with this, FIU has also ordered all crypto exchanges to collect information about such accounts, which may be risky. It is worth noting that for some time now, the use of Cryptocurrency is increasing in India, and a large class is emerging as investors. In such a situation, FIU has made it clear that violation of rules related to crypto exchanges will not be tolerated in any way. Users can read about the 5 Best Cryptocurrency Exchanges in India here.
What is FIU-IND in India
Actually FIU-IND is a financial intelligence unit working under the Ministry of Finance in India. This organization investigates cases related to financial crimes and money laundering. This organization investigates suspicious transactions. FIU works in collaboration with financial intelligence units of other countries to help prevent international money laundering and terrorism financing. FIU-IND was formed in the year 2004.
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Why did FIU crack down on crypto exchanges?
Now the question arises that why has FIU suddenly become so strict on crypto exchanges? Top officials associated with FIU-IND say that in many cases, it has been observed that KYC procedures were not followed properly, and many exchanges violated the rules of TDS (Tax Deducted at Source). Actually, under PMLA in India, crypto exchanges are required to deduct 1 percent TDS on every transaction of Rs 10,000. If a user wants to avoid the deduction of TDS, he has to file their ITR. But many crypto exchanges have violated the rules in this process.
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Binance and Bybit sent a message for the KYC update
After the strictness of FIU-IND, crypto exchange companies like Binance and Bybit in India have sent notifications to users to update KYC and PAN card information has been sought. It is worth noting that Bybit paid a fine of Rs 9.27 lakh in the year 2023 to start its services in India, after which it will now have to work under the rules of the Prevention of Money Laundering Act (PMLA). In fact, in March 2023, the Ministry of Finance took an important step and made registration with the FIU-IND mandatory for crypto exchanges. Apart from this, in the budget for the year 2022, it was proposed to impose a tax of 30 percent on Virtual Digital Assets (VDAs)
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The use of cryptocurrency in India is gradually increasing. In such a situation, the processes of the country’s regulatory bodies are becoming even stricter. The new order of FIU-IND will force crypto exchanges to comply with KYC and PMLA rules.