The financial intelligence arm of India has moved against 25 offshore crypto exchanges, directing those marketplaces to shut access to users in the country after discovering that they had failed to register and comply with anti-money laundering measures. It includes BingX, LBank, CoinW, ProBit Global, BTCC, AscendEX, Zoomex, and Poloniex. Data cited by market trackers show that 14 of the referred platforms together have more than $9 billion in user assets and churn roughly $20 billion worth of trading volume over 24 hours, illustrating how much Indian business has moved to offshore venues.
The Financial Intelligence Unit India (FIU-IND), an entity under the finance ministry, ordered the platforms to remove their apps and sites for Indian users and fulfil obligations under the Prevention of Money Laundering Act. Some platforms have not responded publicly to the notices; access usually continues as long as app stores and internet providers do not deploy blocks and takedowns.
Why Offshore Platforms Are In The Crosshairs
India, in March 2023, formally brought cryptocurrency intermediaries under the purview of reporting entities as part of the Prevention of Money Laundering Act, and they have to ask their customers for details related to investment, trading, or any reportable transactions. The exchanges that cater to Indian users are also mandated to enroll with FIU-IND, conduct strict know-your-customer checks, maintain information, and submit suspicious transaction reports.
Officials argue that many of the offshore venues created large Indian user bases without registering or adhering to Indian KYC and reporting standards. That gap is not merely a technicality: it hinders law enforcement requests, makes tax compliance more challenging, and does not meet the guidelines of the Financial Action Task Force for virtual asset service providers. The FIU’s notices seek to shut those channels by either requiring registration or terminating access.
Who Is Affected and What Users Should Expect
The enforcement sweep names a combination of derivatives-heavy as well as spot-focused exchanges favored by price-sensitive Indian traders. If carried out as instructed, the orders could result in apps being removed from mobile stores and websites banished by Indian internet providers. Phased restrictions: To date, such restrictions have generally been rolled out in “phases” as platforms, app markets, and network providers gradually enforce official demands.
India’s authorities had earlier issued show-cause notices to several big global brands too. Some, such as Binance and KuCoin, later registered with FIU-IND and partially reopened operations after upgrading their KYC procedures, while others, like OKX, left the market. The finance ministry has announced that more than 50 crypto companies have met registration requirements, including some domestic exchanges.
The Data Behind India’s Compliance Push on Crypto
The scale of offshore activity is material. CoinMarketCap data cited by industry observers indicate that a portion of the 25 platforms in focus manage billions in customer balances and billions more in daily turnover, with double-digit figures seemingly routine. That liquidity has lured Indian users who are accustomed to trading for low fees and find deep derivatives markets unavailable onshore.
Policy momentum adds context. In 2022, India brought in a 1% tax deducted at source on crypto trades and a 30% tax on profits, which fed some traders to unregistered platforms. India was listed as No. 1 on the Global Crypto Adoption Index 2023, indicating strong usage at the grassroots even though regulators are moving to tighten oversight. The latest FIU move is supposed to bring that activity in line with local AML safeguards.
What Compliance Means for Exchanges Serving India
Exchanges must:
- Register with FIU-IND.
- Verify the identity of their customers in accordance with Indian Know Your Customer (KYC) requirements.
- Keep records for a specified period.
- Submit suspicious transaction reports (STRs) and cash transaction reports.
Any non-compliance with the norms may result in monetary penalties, freezing of assets, or prosecution under the PMLA mechanism.
For users, the practical upshot is to check if a platform is registered with FIU-IND and to assume stricter identity checks from everyone as the industry moves toward compliance.
Non-custodial wallets and self-hosted storage are beyond the perimeter of the exchange, but on- and off-ramps that interconnect fiat and aggregated liquidity pools reside firmly within regulators’ target radius.
What This Means For India’s Crypto Market
Short-term, the most immediate impact is probably a one-time transfer of trading activity to compliant venues, with liquidity and spreads changing as offshore access vanishes. Domestic exchanges could stand to benefit from inflows if they can compete on product depth and cost while complying with AML rules. For worldwide platforms, registering in India is quickly becoming table stakes rather than a strategic move.
More broadly, India is sending a message that it will enforce AML and tax laws rigorously, with or without a bespoke crypto law. The Reserve Bank of India keeps sounding the alarm over systemic risks posed by private crypto, while the finance ministry relies on the use of existing statutes and international norms to police the sector. The message to exchanges is blunt: get into the regulatory perimeter or risk being locked out of one of the world’s most active bases of crypto users.
