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Crypto Exchanges
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- Context (TH): FIU issued Binance and other crypto exchanges with show-cause notices.
Financial Intelligence Unit (FIU)
- FIU was established in 2004 as an anti-money laundering unit under the Finance Ministry.
- It investigates monthly Cash transaction reports, Suspicious transaction reports and Cross-border wire transfer reports under the Prevention of Money Laundering Act, 2002 (PMLA).
- Suspicious or doubtful transactions are shared with agencies like the Enforcement Directorate, the Central Bureau of Investigation and the Tax Authority.
Crypto Exchanges in India
- A cryptocurrency exchange works similarly to stock exchanges, which helps investors buy and sell in digital currencies such as Bitcoin, Ethereum, or Tether.
- These platforms work on digital marketplaces such as mobile apps or via desktop functions.
- India will block URLs of 9 offshore exchanges, including Binance, after issuing ‘Show Cause’ notices.
- The Finance Ministry mandated that crypto businesses register with the FIU and comply with the PMLA.
- Crypto businesses will become legally obligated to perform Know Your Customer (KYC).
- The obligation is activity-based and not physical presence-based.
