India Tightens AML Rules for Crypto Platforms with Strict Compliance Requirements
India has significantly strengthened its anti-money-laundering (AML) regulations for cryptocurrency platforms, bringing Virtual Digital Asset Service Providers (VDA SPs) under the same financial-monitoring framework as other reporting entities under the Prevention of Money Laundering Act (PMLA). Since March 2023, businesses engaged in specified VDA activities, such as exchanging digital assets for fiat currency or transferring VDAs, must comply with these regulations. This framework applies to both offshore and onshore providers serving the Indian market, regardless of their physical presence in the country.
Crypto platforms must register with the Financial Intelligence Unit-India (FIU-IND) as reporting entities. The registration process is rigorous, requiring applicants to demonstrate robust systems for Know Your Customer (KYC), transaction monitoring, blockchain analysis, Travel Rule compliance, and sanctions screening. Updated guidelines from FIU-IND, issued on January 8, 2026, have made the process even more operationally demanding.
Compliance requirements include thorough customer identification and verification, ongoing due diligence, and transaction monitoring. Platforms must analyze customer transactions to ensure they meet risk and money source limits, with higher-risk customers requiring extra scrutiny. Suspicious transactions must be identified and reported through the necessary channels, emphasizing the importance of blockchain analytics for detecting suspicious flows of money.
Enforcement of these regulations has intensified, as evidenced by the notices issued on September 9, 2026, to 15 VDA service providers, including Weex, Blofin, and Bitunix. Authorities also sought to restrict public access to the applications or URLs of these entities in India, underscoring that offshore status does not exempt platforms from AML obligations. This crackdown reinforces the necessity of compliance for maintaining access to the Indian market.