Two of India’s major crypto exchanges— WazirX and CoinDCX— have registered with the Financial Intelligence Unit-India (FIU) as reporting entities. It is unclear whether there are any other entities that have registered with the FIU as of now. The announcement comes in the wake of a government notification on March 7, 2023, bringing crypto service providers under the ambit of the Prevention of Money Laundering Act (PMLA), 2002. What is FIU: The agency responsible for “receiving, processing, analysing and disseminating information relating to suspect financial transactions” to curb money laundering and financing of terrorism. It is an independent body reporting directly to the Economic Intelligence Council (EIC) which is headed by the Indian Finance Minister. The step taken by the two crypto exchanges is mandatory for all crypto service providers under the act. Why it matters: It is a notable step by crypto companies because Indian agencies such as the Enforcement Directorate have been investigating cases in which perpetrators use cryptocurrencies to launder their illicit gains. A response in the Indian Parliament revealed that the ED has seized more than Rs. 953.70 crore in the course of its investigations. The registration is likely to help facilitate information in a systematic manner. What does it entail: The notification calls for crypto companies to comply with provisions in the PMLA to prevent money laundering and other finance related crimes. An entity will be liable to pay hefty fines or risk imprisonment if it is found flouting these provisions. CoinDCX, in its statement,…
