If you’ve been following the crypto space in India, you’ve probably heard about FIU (Financial Intelligence Unit) and how it’s cracking down on exchanges that don’t follow the rules. But what exactly is FIU, and why does it matter for crypto traders?
Simply put, FIU-IND is the watchdog that keeps an eye on financial transactions to prevent money laundering and fraud. As crypto trading grew in India, the government realized it needed stricter regulations to ensure transparency and security. That’s why, in December 2023, it made FIU registration mandatory for all crypto exchanges operating in India.
This move led to a temporary ban on major international platforms like Binance and KuCoin in early 2024. However, after meeting compliance requirements, both exchanges got back in action later in the year.
So, which exchanges are officially registered with FIU, and what does this mean for Indian crypto traders? Let’s dive in.
What is FIU?
The Financial Intelligence Unit – India (FIU-IND) is an agency under the Ministry of Finance responsible for monitoring and regulating financial transactions to prevent money laundering, fraud, and terror financing. Established in 2004 under the Prevention of Money Laundering Act (PMLA), 2002, FIU-IND plays a pivotal role in maintaining the integrity of the financial system.
Key Functions of FIU:
- Data Collection and Analysis: Gathering and analyzing financial transaction data to detect suspicious activities.
- Compliance Enforcement: Ensuring adherence to anti-money laundering (AML) and Know Your Customer (KYC) norms.
- Coordination: Collaborating with law enforcement agencies for investigations and policy formulation.
Why FIU Was Introduced for Crypto Regulations in India
The rapid growth of cryptocurrency trading in India raised concerns over illicit transactions, tax evasion, and potential misuse of crypto assets. To address these issues, the Government of India mandated that crypto exchanges register with FIU and comply with PMLA guidelines, enhancing transparency and preventing illegal activities.
Timeline of Crypto Regulations in India:
- 2018: The Reserve Bank of India (RBI) imposed a banking ban on crypto transactions, which was later overturned by the Supreme Court in 2020.
- 2021-2022: The government introduced a 30% tax on crypto gains and a 1% TDS on transactions.
- December 2023: The Ministry of Finance required all Virtual Digital Asset (VDA) service providers to register with FIU-IND.
- January 2024: Several offshore crypto exchanges, including Binance and KuCoin, were banned for operating without proper registration.
Importance of FIU Registration for Crypto Exchanges
- Regulatory Compliance: Ensures adherence to AML and KYC policies.
- Risk Mitigation: Reduces financial risks associated with crypto transactions.
- Investor Trust: Enhances credibility among users and investors.
- Prevention of Illicit Activities: Deters money laundering and other illegal activities involving cryptocurrencies.
List of Crypto Exchanges Registered with FIU – Govt of India
As of February 2025, the following crypto exchanges are registered with FIU-IND:
- CoinDCX
- ZebPay
- WazirX
- Unocoin
- Giottus
- BuyUcoin
- KuCoin (Registered in March 2024)
- Binance (Registered in May 2024)
Crypto Exchanges Banned or Suspended by FIU
In January 2024, FIU-IND banned several offshore crypto exchanges, including Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, for operating without proper registration and non-compliance with AML regulations. Some of these exchanges have since initiated compliance measures to resume operations in India.
- March 2024: KuCoin registered with FIU-IND, paid a penalty of ₹3.45 million, and resumed operations.
- May 2024: Binance completed its registration with FIU-IND and, after a hearing, was fined ₹188.2 million in June 2024. The exchange resumed operations post-compliance.
Conclusion
The Financial Intelligence Unit (FIU) plays a crucial role in regulating India’s cryptocurrency landscape, ensuring that transactions are transparent and lawful. With increasing government oversight, it is imperative for investors and traders to engage with FIU-registered exchanges to mitigate risks associated with unregulated platforms.
