Overview
- India’s Financial Intelligence Unit issued updated AML/CFT rules on January 8 that place crypto exchanges under the Prevention of Money Laundering Act as reporting entities.
- Exchanges must collect PAN, a live selfie verified by liveness detection, the user’s latitude and longitude with date and timestamp, and the device IP address during onboarding.
- A refundable ₹1 penny-drop transaction is mandated to verify bank account ownership, alongside a secondary government ID and OTP checks for email and phone.
- Platforms must register with the FIU, file suspicious-transaction reports, and retain customer and transaction records for at least five years or until any investigation concludes.
- High-risk clients face enhanced due diligence with KYC refreshes every six months versus annually for others, and exchanges are directed not to facilitate mixers, tumblers or anonymity-enhancing tokens, with ICOs and ITOs discouraged.