India’s Financial Intelligence Unit has issued show-cause notices to nine offshore virtual digital asset service providers, including Binance, for operating in the country without complying with the money laundering laws, the Finance Ministry said on Thursday.
Apart from Binance, notices have been issued to Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
The Finance Ministry has also asked the Information Technology Ministry to block the URLs of the companies as they have been operating illegally in the country.
Binance is already facing scrutiny in the US after pleading guilty to breaking anti-money laundering laws. Binance chief Changpeng Zhao had to quit as part of a multi-billion dollar settlement following a probe into the functioning of the world’s largest crypto exchange.
The Finance Ministry said that offshore and onshore Virtual Digital Asset service providers operating in India and involved in activities including exchange between virtual digital assets and fiat currencies, transfer and administration of virtual digital assets or instruments enabling control over them must register with the Financial Intelligence Unit-India and comply with the provisions of 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,” it said.