Registration of off-shore Virtual Digital Assets (VDA) service providers in FIU India as Reporting Entity to comply with the norms provided under the Prevention of Money Laundering Act (“PMLA”) – December 04, 2023

Posted On - 31 January, 2024 • By - King Stubb & Kasiva

In July 2023, the Ministry of Finance issued guidelines to the Virtual Digital Assets (“VDA”) service providers, requiring them to be registered as “Reporting entities” in FIU India. Under the PMLA, all crypto exchanges and intermediaries are required to perform KYC of their clients and users of the platforms and maintain the records of documents evidencing the identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients. These guidelines and mandates apply to the offshore crypto exchanges / VDA Serice providers that serve the Indian market are subject to the same guidelines and reporting mandates, as clarified by the Minister in his public statement on December 04, 2023. Any non-compliance by such offshore platforms will result in appropriate action under PMLA.

It was further informed that till now 8 (twenty-eight) VDA service providers, including WazirX, Coin DCX, and Coinswitch, registered with the Financial Intelligence Unit-India under anti-money laundering regulations.