India Issues Compliance ‘Show Cause’ Notices to 9 Offshore Exchanges Including Binance and KuCoin

The Indian government has issued compliance show cause notices to nine offshore crypto exchanges under its Prevention of Money Laundering Act (PMLA), it announced on Thursday.

The notices were issued by India’s Financial Intelligence Unit (FIU) which falls under the nation’s Finance Ministry.

Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex are the nine exchanges. The government has also taken the first steps to block the URLs of “said entities that are operating illegally without complying with the provisions of the PMLA in India.”

The government didn’t provide a specific timeframe or the consequences of not adhering to the notice as there are no crypto-specific precedents for such action in the country.

The action appeared imminent after the government’s written declaration from earlier this month that as many as 28 domestic crypto service providers registered themselves with the FIU. That number has already gone up to 31.

In March, India’s Finance Ministry mandated that crypto businesses will have to register with the FIU, the country’s anti-money laundering unit, and comply with other processes under the PMLA. This meant crypto businesses became legally obligated to perform verification processes such as Know Your Customer (KYC).

“The obligation is activity-based and is not contingent on physical presence in India,” the FIU said. “However, several offshore entities though catering to a substantial part of Indian users were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.”

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