The Financial Intelligence Unit-India (FIU-IND) has issued notices to 15 Virtual Digital Asset Service Providers (VDA SPs) for non-compliance with provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The action has been taken by the Director, FIU-IND, under Section 13 of the PMLA as part of measures against entities found to be operating without complying with India’s anti-money laundering framework.
The entities named in the notices include Weex International Exchange LTD, BLF Global Limited (Blofin), RezorEx, Bitunix LLC, DigiFinex Ltd, Hopeful Technology Co. Ltd. (Toobit), Fibtc Ltd/XT TECHNICAL PTE. LTD. (XT.com), LAtrade Ltd (Latoken), Wootech Limited (WOO X), Marketa Trading Inc. (Pionex), CHN Group LLC (ChangeNow), SimpleSwap LTD, FFGX Group LLC (FixedFloat), UAB Clear White Technologies (WhiteBIT) and FinSeven CZ (Guardarian).
In a related action, the Director, FIU-IND, acting as the nodal officer under Section 79(3)(b) of the Information Technology Act, 2000, has issued notices seeking the takedown of applications and URLs associated with these entities that provide public access to their services in India.
According to the FIU-IND, the platforms were found to be operating illegally in India without complying with applicable provisions of the PMLA.
Virtual Digital Asset Service Providers were brought under India’s Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework in March 2023 through the provisions of the PMLA.
Under the framework, VDA service providers operating in India—whether offshore or onshore—and undertaking specified activities are required to register with FIU-IND as reporting entities and comply with obligations under the PMLA and rules framed under it.
These activities include the exchange of virtual digital assets with fiat currencies, transfers of virtual digital assets, and the safekeeping or administration of virtual digital assets or instruments that enable control over such assets.
The FIU-IND said the obligations are activity-based and do not depend on whether a service provider has a physical presence in India.
Registered VDA service providers are required to comply with reporting, record-keeping and other obligations prescribed under the PMLA and its rules.
The FIU-IND has also cautioned the public about the risks associated with crypto products and non-fungible tokens (NFTs).
It said crypto products and NFTs are unregulated and can be highly risky, and there may be no regulatory recourse for losses arising from such transactions.
