The Financial Intelligence Unit of India (FIU-IND) has issued compliance notices to 25 offshore Virtual Digital Asset (VDA) service providers for violating provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The action comes under Section 13 of the PMLA, which mandates registration and reporting obligations for entities dealing in VDAs.
The FIU has also invoked Section 79(3)(b) of the Information Technology Act (IT Act), 2000, to order the takedown of websites and applications of these platforms, citing illegal operations in India that flout PMLA.
Section 79 of the IT Act protects platforms from liability for user-generated content. However, Part 3(b) of this section states that platforms can lose this protection if they fail to remove unlawful content after being notified by the government.
The list includes global crypto exchanges and platforms such as Huione, BC.game, Paxful, Changelly, CEX.IO, LBank, Youhodler, BingX, PrimeXBT, BTCC, CoinEx, Remitano, Poloniex, BitMex, Bitrue, LCX, Probit Global, BTSE, HIT BTC, LocalCoinSwap, AscendEx, Phemex, ZooMex, CoinCola and CoinW.
These companies, headquartered across jurisdictions such as the United States, United Kingdom, Hong Kong, Seychelles, Singapore, Lithuania, and the Cayman Islands, were found catering to Indian users without registering with the FIU-IND.
Since March 2023, VDA service providers operating in India, whether domestic or foreign, are required to register with FIU-IND as "reporting entities" under the AML-CFT (Anti-Money Laundering and Counter-Financing of Terrorism) framework.
The obligations include reporting transactions, maintaining records, and following due diligence norms, irrespective of whether the company has a physical office in India.
So far, 50 VDA service providers have registered with FIU-IND. However, the regulator continues to identify platforms that offer services to Indian customers while remaining outside the compliance framework.
According to data cited by TechCrunch, 14 of the affected exchanges together hold over $9 billion in assets and recorded nearly $20 billion in trading volume within 24 hours on October 1.
Notably, CEX.IO was among the few firms to respond to TechCrunch. "We are in the research process and will definitely ask and explain our position to the regulator regarding this notice," said Mark Taylor, head of financial crime at CEX.IO, in a statement.
"We are actively exploring pathways to ensure alignment with India's regulatory requirements and any required registration with Indian authorities to ensure long-term accessibility for our users in the region," he added.
Taylor urged Indian users to closely follow updates from both regulators and CEX.IO, noting that the FIU-IND order may affect access, payment options, or app availability. He added that if any impact occurs on accounts or services, the company will provide transparent guidance and instructions on the next steps.
Just weeks before the latest enforcement action, FIU-IND had issued a third revision of its registration circular. The circular made registration more stringent by requiring VDA service providers to submit corporate ownership details, tax filings, contracts with other entities, cybersecurity audit certificates from CERT-IN empanelled auditors, and a live demonstration of compliance systems.
Furthermore, it mandated in-person meetings with FIU-IND officials, where designated compliance officers must explain KYC (know your customer) processes, transaction monitoring, blockchain analysis, etc. Notably, FIU-IND reserved the right to deny or cancel registrations if entities were found non-compliant.
This is not the first time FIU-IND has taken action against major crypto platforms. In previous crackdowns, exchanges such as Binance, Coinbase, KuCoin and OKX faced similar notices. OKX eventually exited the Indian market in 2024, while Binance, Coinbase, and KuCoin registered with FIU-IND to resume services.
Binance restarted operations in India in August 2024, while Coinbase re-entered earlier in 2025, also launching an early-access programme for its Indian users who had already signed up.
The action is significant for multiple reasons. Offshore crypto platforms have grown popular among Indian users due to their easy accessibility and competitive pricing, but their failure to register under Indian laws leaves investors without protection in cases of fraud, hacking, or misuse of funds.
In this light, the Finance Ministry reiterated a cautionary message, saying: "Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions."
By targeting these firms, FIU-IND is reinforcing India's broader regulatory approach, which has steadily tightened over the past two years, first by extending the PMLA framework to digital assets and later by pushing for global coordination on crypto oversight at forums such as the G20.
The move also has immediate market implications. Many of the non-compliant exchanges are well-known global names, and restricting access to them could redirect Indian traders towards domestic platforms that are already following compliance norms, reshaping the country's crypto ecosystem.
Beyond India, the decision reflects a larger global trend where regulators are clamping down on unregistered digital asset firms, underlining the international challenge of governing a borderless and fast-evolving industry, while trying to balance innovation with financial security.