Crypto Exchanges Ordered to Update KYC by June 30, FIU Tightens Rules
If you are investing cryptocurrency in India, it's the right time to update your KYC at the earliest. Financial Intelligence Unit-India (FIU-IND) has ordered all crypto exchanges to enhance and renew their KYC process on or before June 30, 2025. This decision is under the Prevention of Money Laundering Act (PMLA).
Why Is FIU Pushing KYC Updates?
FIU-IND has instructed crypto exchanges to re-verify all user accounts whose KYC details are older than 18 months. Also, they have to collect data on accounts that can be of high-risk. India has seen a rise in cryptocurrency adoption in recent months, and regulatory compliance is now more important than ever.
FIU has made it official: any crypto compliance norm violation will not be accepted. India's leading crypto exchanges such as Binance and Bybit have already begun sending notifications to users, requesting them to update KYC information and provide PAN card details.
What is FIU-IND?
The Financial Intelligence Unit-India is a ministry-level organization that investigates financial crimes, tracks suspicious transactions, and collaborates with foreign counterparts to counter money laundering and terror funding. FIU-IND was formed in 2004 and is a key player in making India's financial system secure.
Why the Crackdown on Crypto Exchanges?
A few transactions were discovered to be in breach of TDS (Tax Deducted at Source) norms. According to India's PMLA guidelines, a 1% TDS has to be withheld on crypto transactions exceeding ₹10,000. Moreover, incorrect KYC procedures were discovered. FIU-IND's move is intended to enforce stringent adherence to PMLA norms.
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Bybit and Binance Take Action
At the direction of FIU, Binance and Bybit have already started notifying users to fill KYC information. Bybit, which paid ₹9.27 lakh in 2023 as a penalty to be operational legally in India, is now entirely within the ambit of PMLA regulations. Interestingly, in March 2023, the Finance Ministry had directed all crypto exchanges dealing in India to get registered with FIU-IND.
