India's crypto sector sees surge in compliance: 28 firms register with Financial Intelligence Unit

In a significant development for the cryptocurrency landscape in India, 28 prominent crypto firms, including WazirX, CoinDCX, and CoinSwitch, have successfully registered their operations with the country's Financial Intelligence Unit (FIU). This mandatory registration, mandated in March of this year, is crucial for firms dealing in virtual digital assets to ensure compliance with the Prevention of Money Laundering Act (PMLA).

India's crypto reporting entities aim for regulatory clarity

Entities engaged in crypto assets in India are classified as 'reporting entities' under the PMLA, a designation aimed at safeguarding investors from potential threats. Pankaj Chaudhary, the Minister of State for Finance, disclosed in Parliament that these 28 crypto-related firms have formally registered themselves over the past two years, fostering transparency in the burgeoning crypto sector.

Industry leaders reflect on regulatory compliance

Acknowledging the significance of this regulatory step, R Venkatesh, Senior VP and Public Policy Head at CoinSwitch, emphasised the clarity it provides on the applicability of India's PMLA provisions to foreign Virtual Digital Asset (VDA) trading platforms. Ashish Singhal, Co-founder and CEO of CoinSwitch, highlighted that being a 'reporting entity' under PMLA guidelines aligns crypto firms with best practices observed by traditional financial institutions, ushering in a new era of transparency.

Singhal elaborated that, as reporting entities, crypto firms are now obligated to follow stringent KYC procedures and maintain detailed records, similar to banks and stockbrokers, thereby contributing to enhanced transparency in the industry.

Offshore platforms await compliance as india sets regulatory framework

While domestic crypto firms have actively embraced regulatory measures, offshore platforms such as Binance and Coinbase are yet to register with the FIU. The news underscores the necessity for these international entities to comply with Indian regulations to avert legal consequences. The industry anticipates further clarity on global crypto regulations as Brazil assumes the G20 presidency, building on India's collaborative efforts during its own presidency.