Tag: fiu

Binance Registers With FIU as It Seeks to Resume Operations in India

Binance, the world’s largest cryptocurrency exchange, has registered with India’s Financial Intelligence Unit (FIU), a senior FIU official said on Friday, as the exchange seeks to resume operations in the country.

The exchange was barred from operating in India in December for non-compliance with local regulations as part of the financial watchdog’s crackdown on offshore crypto exchanges that were operating in the country without registration.

India requires virtual digital asset service providers, like crypto exchanges, to be registered with the FIU as a reporting entity and comply with obligations mandated under the country’s anti-money laundering rules.

While Binance has registered with the FIU, it can resume operations only after paying a penalty for previous non-compliances, which is yet to be determined, Vivek Aggarwal, director of the FIU said.

The FIU had issued show cause notices to 9 offshore cryptocurrency exchanges in December 2023 for non-compliance with local rules.

The financial watchdog had also asked the ministry of electronics and information technology to block online access to the exchanges.

Offshore crypto exchange KuCoin has also registered with the FIU and has resumed operations after paying a fine of 3.45 million rupees ($41,313), Aggarwal said.

Kucoin had announced the registration in March, but had not shared details of the penalty.

Binance and KuCoin did not immediately respond to emails seeking comment.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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OKX Exits India’s Crypto Space Failing to Meet Legal Requirements

India has tightened its noose around crypto-related businesses, mandating sector firms to comply with certain legal requirements. Failing to comply with these rules, crypto exchange OKX has decided to exit India’s crypto sphere. The Seychelles-headquartered exchange informed its Indian community on March 21 that they should close their accounts on the platform before April 30. OKX entered the Indian market between August and November last year. The company has been in business since 2017 and was founded by Star Xu.

The OKX team has issued a notice to Indian community saying that the exchange is no longer providing services in India.

“Due to local regulations, you need to close all margin positions, as well as positions in perpetuals, features, and options. Redeem all funds from Grow products,” the exchange said in its notice.

Starting April 30, accounts held by India-based people on OKX will be restricted. While they will still be allowed to withdraw funds, all other functions will be rendered defunct.

“Your funds will remain safe and available in your account until you withdraw them,” the exchange noted.

As of now it remains unclear if OKX’s exit from India’s crypto space is temporary until the company comes in compliance with the rules or if it’s making a long-term exit. India’s financial authorities, in order to make the crypto sector secure for people to engage with, is adding layers of regulations for sector players to comply with.

In December 2023, the Financial Intelligence Unit India (FIU) issued show cause notices to nine offshore companies asking them to show evidence that they were following all of India’s rules. These companies are — Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.

The FIU and the finance ministry of India are trying to ensure that all crypto-related firms are following the Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023. Soon after the announcement, the Binance and Kraken apps disappeared from Apple’s App Store and Google’s Play Store in India.

In the times to come, India is expected to deploy more layers of rules over the crypto sector following the regulatory roadmap finalised by the G20 group last year.

 

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Financial Intelligence Unit Imposes Penalty of Over Rs. 5 Crore on Paytm Payments Bank

India’s Financial Intelligence Unit (FIU) on Friday imposed a penalty of Rs. 5,49,00,000 ($662,565) on Paytm’s banking arm, Paytm Payments Bank, for violations in reporting illegal money routed through its accounts, the country’s finance ministry said.

The FIU initiated a review of Paytm Payments Bank after information from law enforcement agencies about some entities engaged in illegal acts, including organising and facilitating online gambling, and routing proceeds through the bank.

“The money generated from these illegal operations, i.e. proceeds of crime, were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank,” the ministry said in a statement.

The payments bank failed to report suspicious transactions and conduct due diligence of these accounts, the FIU’s order said.

Based on the “voluminous” material available on record, it found that the charges against Paytm Payments Bank were substantiated, the ministry added.

The penalty pertains to issues within a business segment that was discontinued two years ago, a spokesperson for Paytm Payments Bank said. The company has since enhanced its monitoring systems and reporting mechanisms to the FIU, the spokesperson added.

Earlier in February, the Reserve Bank of India (RBI) had asked Paytm Payments Bank to wind down operations by March 15 due to persistent compliance issues and supervisory concerns.

Paytm had earlier said that it received notices for information and explanations from the authorities, including the financial crime fighting agency Enforcement Directorate, and was providing them the same.

Meanwhile, Paytm has cut some ties with its payments bank unit in an attempt to address compliance concerns that triggered a meltdown in its shares last month.

Paytm CEO Vijay Shekhar Sharma owns a 51 percent stake in Paytm Payments Bank, while Paytm owns the rest.

Earlier this week, Sharma stepped down as non-executive chairman and board member of the payments bank unit, as part of a major overhaul.

© Thomson Reuters 2024

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