The Indian government has issued compliance show cause notices to nine offshore crypto exchanges and initiated measures to block the URLs of these exchanges. It cited their illegal operations and non-compliance with the PMLA provisions in India.

The move, according to CoinDesk, aims to ensure adherence to the prevention of money laundering regulations,

Cointelegraph noted that this action falls under the Prevention of Money Laundering Act (PMLA) and reflects the government's commitment to curb unlawful activities in the crypto space.

Government's Firm Stance on Compliance

The notices were made public by India's Financial Intelligence Unit (FIU), which operates under the Finance Ministry. Prominent platforms such as Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex are among the exchanges receiving notices.

Though the government has not specified the timeframe for compliance or the potential consequences, this action signifies the seriousness with which the authorities are approaching the matter.

It is worth noting that there is a lack of crypto-specific precedents for such actions in India. Therefore, these compliance show cause notices serve as a clear signal to all crypto businesses to promptly adhere to the regulations to avoid any potential legal ramifications.

Rising Number of Registered Crypto Service Providers

The recent development follows the government's earlier declaration of increased registration of domestic crypto service providers. Currently, 31 domestic crypto service providers have registered with the FIU, surpassing the previously reported figure of 28.

This surge in registrations demonstrates the industry's acknowledgment of the need to comply with the government's regulatory framework.

Government's Mandate on Compliance

Last March, India's Finance Ministry mandated that crypto businesses register with the FIU and comply with various processes under the PMLA. This included adhering to essential verification procedures like Know Your Customer (KYC). It is important to note that adherence to these regulations is not contingent upon physical presence in India.

The FIU emphasizes that offshore entities catering to a significant portion of Indian users must come under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.

The government's measures highlight its intention to promote a secure and transparent crypto ecosystem in India. By cracking down on non-compliant exchanges, the government aims to maintain the integrity of financial transactions and safeguard against potential illicit activities.

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