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India Imposes Bank-Style Crypto KYC: Live Selfies, Geo-Tagging, Penny-Drop Checks

The FIU’s January 8 guidance brings exchanges under PMLA reporting with strict identity, location and bank verification to curb anonymous flows.

Overview

  • Exchanges must capture a live selfie with liveness detection and record latitude–longitude, timestamp and IP address at signup.
  • Users must provide PAN plus a second government ID, verify email and phone via OTP, and pass a Re 1 penny‑drop bank ownership check.
  • All virtual digital asset providers, including offshore platforms serving Indian users, must register with FIU‑IND, file suspicious transaction reports and retain records for at least five years.
  • Platforms are barred from facilitating mixers, tumblers and privacy coins, and the guidance strongly discourages ICOs and ITOs as high‑risk activities.
  • Firms must refresh KYC every six months for high‑risk clients and annually for others, conduct enhanced due diligence for PEPs and FATF‑linked jurisdictions, appoint a designated director and undergo CERT‑In cybersecurity audits, with past non‑compliance already drawing ₹28 crore in penalties.