Skip to content
- India now has 49 cryptocurrency exchanges officially registered under its anti-money laundering rules.
- The FIU identified major risks, including hawala transactions, illegal gambling, and online fraud using crypto.
- Offshore exchanges face stricter enforcement, with 25 platforms blocked until they comply.
The Financial Intelligence Unit of India (FIU-IND) released its 2024-25 report, confirming a significant milestone for the crypto sector. A total of 49 exchanges are now registered as reporting entities under the Prevention of Money Laundering Act (PMLA).
The government has successfully incorporated Virtual Digital Assets into the Indian regulatory regime, which it initiated in early 2023. Of the total registered entities, 45 operate within the country, while the remaining four operate from abroad and have completed the lengthy registration process.
Registration will enable the government to track transactions, monitor suspicious activity, and enforce compliance standards. This is in line with the Indian government’s efforts to develop a safe, transparent, and accountable cryptocurrency ecosystem.
FIU Report Flags High-Risk Crypto Transactions
The FIU report focuses on the strategy relating to the Suspicious Transaction Reports (STRs) filed with the exchanges. FIU stated that the cryptocurrency market presents opportunities for wealth generation and financial innovation. The FIU stated that the cryptocurrency markets are a significant target for criminals.
The report identified “several high-risk areas.” Cryptcriminals finance their illicit gambling operations, hawala money transfer systems, and complex fraud schemes using VDAs. “The trail led to an illicit adult content site. Exchanges are obliged to trace the owners of crypto wallets and trace transactions between hosted and unhosted addresses.
In a bid to enforce compliance, the FIU imposed a total penalty of 28 crores of rupees on these non-compliant exchanges. The government sends a very clear message to these exchanges: it will not accept voluntary or lax compliance in the future.
Dividing the Market and Blocking Non-Compliant Platforms
The data obtained from the FIU reveals the widening gap in the number of compliant and non-compliant exchanges. Five major offshore exchanges, including Binance, Coinbase, and Mudrex, are in operation after a successful registration process. Authorities blocked a total of 25 offshore exchanges, including BitMEX, LBank, and Phemex, in October 2025.
These exchanges cannot handle Indian business unless they fulfill the requirements for registration and reporting. The clean-out operation has resulted in a centralized business activity for Indian transactions in these exchanges that are regulated. The exchanges have to appoint a director and a principal officer to handle relations with the government.
Looking ahead, the FIU intends to provide further regulatory oversight in the form of risk assessments as well as screening of sanctions. India is currently among the most scrutinized nations when it comes to trading in digital assets.
Related Reading: Bitcoin Nears 21 Million Cap as Miners Prepare for a Fee-Driven Future
