Will FIU ban in India affect your investment in cryptocurrencies? – Forbes India Advisor

With the high adoption of cryptocurrencies globally, there is also a subsequent increase in the number of cryptocurrency exchanges – platforms that allow users, traders or investors to buy, sell and store virtual currencies.

A cryptocurrency exchange works just like a stock exchange that helps users trade digital currencies like Bitcoin, Tether, or Ethereum. These exchanges operate in digital markets like desktop functions similar to electronic brokerage or mobile applications. Cryptocurrency exchanges also provide users with a range of trading and investment tools.

In the latest development regarding local cryptocurrency exchanges, the Indian government has taken action to block the URLs of nine cryptocurrency exchanges in India. Here’s everything you need to know.

India blocks URLs of some cryptocurrency exchanges

On December 28, 2023, a show cause notice was sent to nine offshore cryptocurrency exchanges by the Financial Intelligence Unit (FIU) after they were found to be “operating illegally” and not complying with India’s anti-money laundering law. The Financial Intelligence Unit comes under the Indian Ministry of Finance and has asked the Ministry of Electronics and Information Technology (MeitY) to block the URLs of the nine cryptocurrency exchanges in India.

The notice was sent to them by the Financial Intelligence Unit for operating illegally in India. The nine cryptocurrency exchanges that received the notice include Binance, Huobi, Kraken, Gate.io, Kucoin, Bitstamp, MEXC Global, Bittrex, and Bitfenex.

The notice states, “As part of compliance actions against the nine offshore entities, the Financial Intelligence Unit of India (FIU IND) has issued compliance notices to Virtual Digital Asset Service Providers (VDA SPs) for the PMLA (Prevention of Money Laundering Act) Act, 2002. under Section 13.”

The notice also states that “the Regulation imposes standard reporting and other obligations on VDA providers under the 2002 Act, which also includes registration with the FIU IND.” As of now, 31 VDA providers have completed their registration with the FIU IND.

The rule provides that virtual digital asset service providers, whether operating outside or within the country, engage in activities such as transferring virtual digital assets, converting virtual digital assets into fiat currency, or facilitating the control, custody, or management of virtual digital assets. Digital assets need to be registered with the FIU IND as a “reporting entity”.

They are also required to adhere to the requirements under the Anti-Money Laundering Act, 2002. However, a large number of offshore entities serve a notable portion of Indian users, avoid registration, and therefore fall outside the scope of Anti-Money Laundering (AML). And the framework for combating tourism financing.

The Financial Intelligence Unit of India acts as the nodal national agency mandated to receive, process, analyze and exchange information relating to suspicious financial transactions with foreign financial intelligence units and law enforcement agencies.

What should Indian consumers do to mitigate URL blocking?

If you are still trading on an international platform that is not FIU-registered, but has not yet been banned, it is recommended that you move your assets to an Indian cryptocurrency exchange that is FIU-registered.

With the inherent risks associated with trading on international platforms, the right way forward is to not panic and sell your assets instead of just moving them to the Indian stock exchange or your personal wallet.

Once it reaches your personal wallet, you can easily exchange or sell it as per your wish.

Among the FIU-compliant companies is Mudrex, which saw a $1 million increase in its cryptocurrency deposits from prominent exchanges including Binance.

“The Government of India has always supported fostering innovation and fostering responsible growth in the cryptocurrency industry,” said Idul Patel, CEO and Co-Founder, Mudrex. “Indian investors should always aim to hold their assets in FIU compliant entities as this gives them local experience and, most importantly, “This is a means of legal recourse against fraudulent activities in their accounts.”

Indian investors should always aim to hold their assets in FIU compliant entities as this gives them local experience and, more importantly, a legal recourse against fraudulent activities in their accounts. Patel says it is always a best practice when using funds on foreign exchanges, one should aim to bring the money back to India.

Read also: SEC Approval of Bitcoin ETF: What It Means for Indian Investors

Unblocked Cryptocurrency Exchanges in India

There are currently 31 cryptocurrency companies in India registered with the FIU. Find a list of the best cryptocurrency exchanges you can consider transferring your cryptocurrency assets to.

com.UnoCoin

Unocoin is one of the oldest and most established exchanges in India to buy, sell and store cryptocurrencies. Users can trade eighty different cryptocurrencies on this platform as well as free Bitcoins upon registration. Users can also refer and earn 15% of their transaction fees.

MinisterX

WazirX is one of the fastest growing exchanges in India with over sixty thousand registered users. It is also known for its beginner-friendly interface and advanced trading charts available via Android, web, iOS, and Windows apps. It offers a wide range of tradable pairs and coins at competitive prices.

ZebPay

ZebPay is a well-known exchange among cryptocurrency investors for interest earnings on dormant cryptocurrency holdings. Provides 4% guaranteed fixed returns for cryptocurrency lending. At present, the exchange supports more than 100 cryptocurrencies with about 50 thousand registered users.

CoinDCX

CoinDCX is one of the most transparent and secure cryptocurrency exchanges in India. The onboarding process is carried out securely through a set of security checks performed through automated software applications such as biometrics. It also provides self-wallets to its users.

Modrex

Mudrex was launched in 2018 with a vision to make investing in cryptocurrencies long-term and less risky. This exchange platform is one of the oldest to be registered with FIU in India and is 100% compatible with Indian users. The platform has more than one million invested users. Mudrex offers its users the unique advantage of not charging fees for cryptocurrency deposits.

Queen switch

CoinSwitch is one of the best cryptocurrency exchanges for beginners. It allows users to trade over 100 cryptocurrencies at a price as low as INR 100 through an easy user interface. It also provides trading pairs from INR to Crypto Rupee Index, which is the benchmark index for measuring the performance of the Indian Rupee-based cryptocurrency market.

Learn more about the best crypto exchanges in India.