- FIU reviews linked crypto transactions to scams, fraud, gambling networks, and serious criminal activities.
- Non-compliant crypto platforms were fined ₹28 crore in FY 2024–25 for AML breaches.
- Authorities are building intelligence on transaction hotspots and high-risk digital assets.
India is accelerating its push to regulate the crypto sector as enforcement agencies sharpen their focus on financial crime risks linked to digital assets.
During the 2024–25 financial year, 49 cryptocurrency exchanges formally registered with the Financial Intelligence Unit, marking a decisive step toward tighter anti-money laundering and counter-terror financing controls.
The move reflects a broader regulatory recalibration as authorities respond to growing evidence of crypto misuse and expand scrutiny across platforms operating in the country.
The regulatory shift has also triggered wider discussion within the domestic crypto ecosystem.
A recent post on X by CoinDCX CEO Sumit Gupta drew attention to the intensifying compliance environment, as exchanges increasingly operate under FIU supervision.
The post circulated as registration, monitoring, and enforcement became central themes in India’s crypto policy during the financial year.
FIU flags misuse risks
A review of Suspicious Transaction Reports submitted by crypto platforms during FY 2024–25 revealed repeated patterns of high-risk activity, reported the Press Trust of India.
The analysis found crypto funds linked to scams, fraud, gambling networks, unaccounted transfers, and peer-to-peer misuse.
The FIU also identified more serious risks, including links to dark net services, terror financing, and child sexual abuse material.
Exchanges under one regulator
Of the 49 registered exchanges, 45 are based in India, and four operate overseas.
Unlike several jurisdictions where crypto oversight is split across multiple agencies, India has designated the FIU, which operates under the Ministry of Finance, as the single authority responsible for supervising crypto exchanges.
Industry leaders have pointed out that India’s crypto market is more competitive than it is often perceived, with multiple platforms vying for users and liquidity.
This competitive environment, they argue, can support innovation, provided regulatory expectations are clear and consistently enforced across all players.
Compliance rules explained
Crypto exchanges in India are classified as Virtual Digital Asset Service Providers and have been covered under the Prevention of Money Laundering Act since 2023.
As part of this framework, platforms are required to submit Suspicious Transaction Reports, identify wallet owners, track token fundraising activity such as IPO-style launches, and monitor transfers between hosted and un-hosted wallets.
Following registration, exchanges must also disclose their banking relationships, appoint compliance officers, conduct internal audits, apply risk-based customer checks, screen transactions against sanctions lists, and carry out regular risk assessments.
All relevant data must be shared with the FIU to support ongoing supervision.
Enforcement and penalties
Enforcement has accompanied registration. During FY 2024–25, crypto platforms that failed to meet Anti Money Laundering (AML) obligations were fined a combined ₹28 crore.
The FIU also mapped regional transaction hotspots and identified digital assets frequently associated with illicit activity, strengthening the government’s broader monitoring and intelligence capabilities.
Source: https://coinjournal.net/news/india-tightens-crypto-oversight-as-exchanges-move-under-fiu-monitoring/
