- FIU reports linked crypto transactions to scams, fraud, gambling networks, and serious criminal activity.
- Noncompliant crypto platforms were fined ₹28 crore in the 2024–25 fiscal year for AML violations.
- Authorities are gathering information on high-risk transaction hotspots and digital assets.
India is stepping up efforts to regulate the cryptocurrency sector as supervisory bodies increase scrutiny of financial crime risks associated with digital assets.
During the 2024–25 fiscal year, 49 crypto exchanges were formally registered with the Financial Intelligence Unit (FIU), marking a decisive move toward stricter controls to prevent money laundering and terrorist financing.
This regulatory shift reflects a broader recalibration as authorities respond to growing evidence of crypto misuse and expand oversight of platforms operating in the country.
The regulatory changes have also prompted a wider debate within the national crypto ecosystem.
A recent post on X by CoinDCX CEO Sumit Gupta highlighted the intensifying compliance environment as exchanges increasingly fall under FIU supervision.
The post circulated while registration, monitoring, and enforcement became central topics in Indian crypto policy during the fiscal year.
Misuse risks flagged by FIU reports
A review of suspicious transaction reports filed by crypto platforms during 2024–25 revealed recurring patterns of high-risk activity, according to the Press Trust of India.
The analysis found crypto funds connected to scams, fraud, gambling networks, undeclared transfers, and peer-to-peer abuse.
The FIU also identified more severe risks, including links to dark web services, terrorist financing, and material involving child sexual abuse.
Exchanges under a single regulator
Of the 49 registered exchanges, 45 are based in India and four operate from abroad.
Unlike some jurisdictions where crypto oversight is split among multiple agencies, India has designated the FIU, under the Ministry of Finance, as the single authority responsible for supervising cryptocurrency exchanges.
Industry leaders note that the Indian crypto market is more competitive than often assumed, with multiple platforms vying for users and liquidity.
They argue that this competitive environment can support innovation, provided regulatory expectations are clear and consistently applied across all participants.
Explaining the compliance rules
Crypto exchanges in India are classified as Virtual Digital Asset Service Providers and have been subject to the Prevention of Money Laundering Act since 2023.
Under this framework, platforms must file Suspicious Transaction Reports, identify wallet owners, monitor fundraising activity via tokens (such as IPO-style launches), and track transfers between hosted and non-hosted wallets.
After registration, exchanges must also disclose their banking relationships, appoint compliance officers, conduct internal audits, apply customer risk-based controls, screen transactions against sanctions lists, and perform regular risk assessments.
All relevant data must be shared with the FIU to support ongoing supervision.
Enforcement and penalties
Enforcement has accompanied registration. In the 2024–25 fiscal year, crypto platforms that failed to meet anti-money-laundering obligations were collectively fined ₹28 crore.
The FIU has also mapped regional transaction hotspots and identified digital assets frequently associated with illicit activity, strengthening the government’s broader monitoring and intelligence capabilities.