- Bybit fined $1.06 million for PMLA violations
- India blocked Bybit websites and suspended exchange operations in the country
- Bybit seeks VDASP license amid regulatory uncertainty
India’s financial regulators have imposed a substantial fine on Bybit, one of the world’s largest cryptocurrency exchanges, for failing to comply with the country’s anti-money laundering rules.
According to the Ministry of Finance, the fine amounted to $1.06 million (INR 9.27 million). This enforcement action underscores India’s determination to regulate its growing cryptocurrency market, even as the exact status of Bybit’s compliance efforts remains unclear.
Why such a large fine?
The compliance issues began when Indian authorities discovered that Bybit was operating without the mandatory registration required under the Prevention of Money Laundering Act (PMLA).
India’s Financial Intelligence Unit (FIU) classifies platforms offering digital asset services as “reporting entities,” subject to PMLA obligations. In December 2023 the FIU publicly identified several crypto exchanges for lapses in meeting local AML requirements, though Bybit was not listed among those initially named. Nevertheless, Bybit continued to expand its presence in India without completing the required registration, prompting the FIU to take punitive measures.
As part of enforcement actions, Indian authorities used the Ministry of Electronics and Information Technology (MeitY) to block Bybit’s websites under the Information Technology Act of 2000, effectively halting the exchange’s onshore operations. The website blocks and the financial penalty effectively curtailed Bybit’s ability to serve Indian users from its existing infrastructure.
The suspension followed Bybit’s own announcement that it would pause services in India “in light of recent developments with Indian regulators,” suggesting the company anticipated heightened scrutiny and may have been preparing to respond to regulatory intervention.
Bybit applies for VDASP license in India
Amid these regulatory challenges, Bybit has been taking steps to regularize its presence in India. The exchange submitted an application for registration as a Virtual Digital Asset Service Provider (VDASP) in order to operate legally within the country’s regulatory framework.
The application was completed on June 26, 2024, signaling a proactive effort to meet Indian compliance requirements. Vikas Gupta, Bybit’s country head for India, expressed optimism about securing a full operational license in the coming weeks and suggested the exchange expects a smoother regulatory relationship if approval is granted.
Confusion has surrounded the exact compliance status: early notices and statements implied successful registration and details about the fine, but some of those announcements were later withdrawn. That sequence left the public and stakeholders uncertain about Bybit’s precise standing with Indian regulators.
India’s enforcement approach highlights the government’s emphasis on ensuring that all financial entities — including crypto trading platforms — adhere strictly to AML and counter-terrorism financing standards. Regulators are signaling that offshore and onshore operators alike must satisfy local legal requirements or face sanctions, website blocks, and fines.
Other major exchanges have faced similar regulatory actions in India for PMLA non-compliance and related financial law breaches. Platforms such as Binance, KuCoin and OKX have also encountered scrutiny and enforcement measures as Indian authorities tighten oversight over digital asset services.
For crypto firms operating in India, the message is clear: obtain the appropriate registration, implement robust AML controls, and maintain transparent reporting to avoid penalties and operational disruptions. For Indian users and investors, the developments underscore the importance of using platforms that meet local regulatory standards and of monitoring regulatory updates that affect access to international exchanges.