The Financial Intelligence Unit India (FIU IND) has issued compliance showcause notices to nine offshore Virtual Digital Assets Service Providers (VDA SPs) for alleged violation of the Prevention of Money Laundering Act 2002 (PMLA).

VDA SPs were brought into the ambit of Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act 2002 in March 2023.

The nine offshore VDA service providers are: Binance, KuCoin, Huobi, Kraken,, Bittrex, Bitstamp, MEXCGlobal, and Bitfinex.

Meanwhile, the Director of FIU IND has written to the Secretary, Ministry of Electronics and Information Technology, to block the URLs of the said entities that are operating illegally without complying with the provisions of the PML Act in India.

VDA SPs operating in India (both offshore and onshore) and engaged in activities such as 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.

They are required to be registered with FIU IND as reporting entity and comply with a set of obligations as mandated under the Prevention of Money Laundering Act (PMLA) 2002.

The obligation is activity-based and is not contingent on physical presence in India.

The regulation casts reporting, record keeping, and other obligations on the VDA SPs under the PML Act, which also includes registration with the FIU IND.

Till date, 31 VDA SPs have registered with FIU IND. However, several offshore entities, though catering to a substantial part of Indian users, were not getting registered and coming under the Anti Money Laundering and Counter Financing of Terrorism framework.