The government has also issued notices to these entities with respect to takedown of the application/URLs for public access, which have been found to be operating illegally without complying with the relevant provisions of the PMLA in India, it said on Wednesday.
As part of recent compliance action against such entities, the Financial Intelligence Unit-India (FIU-IND) has issued notices for non-compliance to the 25 offshore Virtual Digital Asset Service Providers (VDA SPs) under Section 13 of the PMLA, 2002, it said.
The statement also cautioned citizens against using VDAs. “It must be mentioned that the crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions,” it said.
The other entities under notice include Huione (formerly known as Huione Guarantee) of Cambodia, CEX.IO of the US and the UK, LBank (LBK Blockchain Co Ltd) of the British Virgin Islands, PrimeXBT of Saint Lucia, Coinex of Hong Kong, Remitano of Singapore, Poloniex based in Boston, BitMex in Seychelles, and LCX in Liechtenstein, the statement said.
Till date, 50 VDA SPs have registered with FIU-IND. However, from time to time, entities that are catering to Indian users but not registering — and thus remaining outside the AML/CFT framework — are identified by FIU-IND, it said.
VDA SPs were brought into the ambit of the anti-money laundering and counter-financing of terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PMLA) in March 2023.
VDA SPs operating in India (whether offshore or onshore) and engaged in activities like exchange between virtual digital assets and fiat currencies, transfer of virtual digital assets, safekeeping or administration of virtual digital assets, or instruments enabling control over virtual digital assets, etc., are required to be registered with FIU-IND as Reporting Entities and comply with the set of obligations as mandated under the PMLA, 2002, it said.
“These obligations are activity-based and are not contingent on physical presence of the entity in India. The regulation casts reporting, record-keeping, and other obligations on the VDA SPs under the PMLA, which also includes registration with the FIU-IND,” it added.
