New Delhi: The Financial Intelligence Unit-India has issued non-compliance notices to 15 virtual digital asset service providers and initiated action to restrict public access to applications and online services found operating without meeting India’s anti-money-laundering requirements.
The notices were issued under Section 13 of the Prevention of Money Laundering Act, 2002. The action covers Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT and Guardarian.
FIU-India also issued notices seeking the takedown of the applications or URLs associated with these entities. That step was taken under the Information Technology Act and the applicable intermediary rules after the services were found operating without compliance with the relevant Indian requirements.
Virtual digital asset service providers were brought within the anti-money-laundering and counter-financing-of-terrorism framework under the PMLA in March 2023. The framework applies to specified crypto-related activities and imposes reporting, record-keeping and customer due-diligence obligations.
A provider carrying out covered activity in India must register with FIU-India as a reporting entity. The requirement is based on the services offered to users in India and does not depend on whether the company has a physical office or permanent establishment in the country.
Covered activities include exchange between virtual digital assets and fiat currencies, transfers of virtual assets, safekeeping or administration of such assets, and services involving instruments that enable control over them.
The regulatory approach is intended to reduce the misuse of digital-asset channels for laundering criminal proceeds or financing unlawful activity. Reporting entities are required to maintain prescribed records and identify and report suspicious transactions in accordance with the law.
The latest action does not by itself establish that every customer transaction on the named platforms involved wrongdoing. It concerns the providers’ alleged failure to complete registration and comply with the obligations applicable to businesses serving the Indian market.
A takedown notice is aimed at limiting access to a non-compliant service while the regulatory issue is addressed. The practical effect can depend on implementation by intermediaries, application platforms and internet-service systems, as well as any response submitted by the entities concerned.
The government has separately cautioned that crypto products and non-fungible tokens remain unregulated as financial products and can carry significant risks. Users may have limited or no regulatory recourse for losses arising from price volatility, platform failure, fraud or unauthorised activity.
India’s framework distinguishes anti-money-laundering supervision from broader recognition of a crypto asset as legal tender or a regulated investment product. Registration with FIU-India therefore does not amount to a government guarantee of a platform or the value and safety of assets offered through it.
For users, the enforcement action underlines the importance of checking whether a service complies with Indian reporting requirements before transferring funds or digital assets. It also reinforces the need to understand custody arrangements, withdrawal rules and the legal entity responsible for a platform.
The named providers will have the opportunity to respond through the applicable process. FIU-India’s action signals that offshore operation does not exempt a platform from Indian compliance requirements when it carries out covered activities for customers in the country.
