The Financial Intelligence Unit-India has issued notices for non-compliance to 15 Virtual Digital Assets Service Providers under Section 13 of the Prevention of Money Laundering Act, 2002, as part of compliance action against entities operating in the virtual digital asset sector.
The action covers Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNOW, SimpleSwap, Fixedfloat, WhiteBIT and Guardarian, according to the notice issued by the Ministry of Finance.
FIU-IND Acts Against 15 VDA Service Providers
The notices were issued by the Director of FIU-IND to the 15 service providers for non-compliance under the Prevention of Money Laundering Act.
The entities named in the action include Weex International Exchange LTD, BLF Global Limited, RezorEx, Bitunix LLC, DigiFinex Ltd, Hopeful Technology Co. Ltd., Fibte Ltd/XT TECHNICAL PTE. LTD., Latrade Ltd, Wootech Limited, Marketa Trading Inc., CHN Group LLC, SimpleSwap LTD, FFGX Group LLC, UAB Clear White Technologies and FinSeven CZ.
The government said Virtual Digital Asset Service Providers were brought within the Anti-Money Laundering and Counter Financing of Terrorism framework under the Prevention of Money Laundering Act in March 2023.
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Takedown Notices Issued for Platforms
The Director of FIU-IND, acting as the nodal officer under Section 79(3)(b) of the Information Technology Act, 2000, has also issued notices to the entities for takedown of their applications and URLs for public access. The government said the platforms had been found to be operating illegally without complying with relevant provisions of the PMLA in India.
VDA service providers operating in India, whether offshore or onshore, and engaged in activities such as exchanging virtual digital assets and fiat currencies, transferring virtual digital assets, safeguarding or administering virtual digital assets or instruments enabling control over them, are required to register with FIU-IND as Reporting Entities.
They are also required to comply with obligations under the PMLA and rules framed under it. The requirements are activity-based and do not depend on whether the service provider has a physical presence in India.
Registration and Reporting Obligations Apply to VDA Firms
The government said the regulatory obligations include reporting, record keeping and other requirements imposed on VDA service providers under the PMLA, including registration with FIU-IND.
The notice also reiterated a general public warning on crypto products and NFTs, stating that they are unregulated and can be highly risky. It added that there may be no regulatory recourse for losses arising from such transactions.
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