India’s Financial Intelligence Unit (FIU-India) is currently in the process of approving two offshore crypto exchanges to resume operations in the country by the end of the 2025 fiscal year. This decision follows a thorough review of their compliance with anti-money laundering (AML) laws. The FIU has been assessing requests from four exchanges that were previously banned for non-compliance with India’s strict AML regulations.
The FIU’s main responsibility is to ensure that financial institutions, including crypto exchanges, adhere to AML standards. The agency has already granted approvals to Binance and KuCoin after these platforms were initially blocked for failing to meet compliance standards. The FIU is currently reviewing four new requests, with at least two exchanges expected to be cleared following a comprehensive review process that includes assessments of transaction transparency and suspicious transaction reporting (STR). The agency has emphasized that compliance with Indian financial regulations is a top priority and that penalties will be imposed where necessary.
The Indian government’s approach to cryptocurrencies has evolved in recent years, aiming to balance innovation with financial security. In April 2022, India introduced a 30% tax on crypto gains and a 1% tax deducted at the source (TDS) on every crypto transaction to monitor the flow of digital currencies and combat illicit activities like money laundering and terrorism financing. Regulators have been closely monitoring India’s crypto industry to create a more transparent ecosystem while mitigating the risks associated with the largely unregulated digital asset space.
The upcoming approvals for additional offshore exchanges could potentially increase competition within the domestic market. This would offer Indian investors more trading options and potentially enhance liquidity in the crypto market. Additionally, the Department of Economic Affairs (DEA) is expected to release a consultation paper on crypto legislation by October. This paper will seek input from industry stakeholders and play a crucial role in shaping India’s long-term regulatory framework for digital assets.
The approval of offshore crypto exchanges in India reflects the evolving regulatory landscape for cryptocurrencies in the country. With a focus on compliance and transparency, regulators are working to ensure a secure and thriving crypto market that benefits both investors and the broader economy.
