The Financial Intelligence Unit – India (FIU-IND), operating under the Ministry of Finance, is India’s central agency for preventing financial crimes. Backed by the Prevention of Money Laundering Act (PMLA), FIU ensures that crypto exchanges adhere to essential KYC/AML norms, suspicious transaction reporting, and regulatory transparency.

Mandatory FIU Registration for Exchanges

Any exchange operating in India must register with FIU‑IND under the PMLA framework. Compliance entails:

• Strong KYC protocols (like Aadhaar and PAN verification)

• Monitoring & reporting suspicious transactions

• Filing Cash Transaction Reports (CTRs) and Suspicious Transaction Reports (STRs)

• Maintaining AML infrastructure and audit readiness

What Happens If an Exchange Isn’t FIU-Compliant

• Platforms may be blocked or fined. In 2023, FIU issued show-cause notices to exchanges like Binance, KuCoin, and others.

• Non-compliant platforms lose banking relationships and may face enforcement actions.

Why FIU Compliance Benefits Users

1. Legal Protection – Registered platforms are aligned with Indian law.

2. Security – Adherence to AML/KYC norms reduces fraud risk.

3. Transparency & Trust – Investors can check compliance status publicly.

4. Banking Support – Easier INR transactions and banking partnerships.

FIU-Registered Exchanges in India

As of mid-2025, several major platforms have achieved FIU-compliant status:

• FlitPay

• CoinDCX

• WazirX

• ZebPay

• Unocoin

• BitBNS

• CoinSwitch

• Mudrex

• Binance

• Coinbase

• Bybit

• KuCoin

Notable FIU Actions in 2025

• Binance was fined ₹188.2 million (~US$2.25 million) for non-compliance and later registered.

• KuCoin paid ₹3.45 million and also achieved registration.

• Coinbase gained clearance to re-enter the Indian market with pending retail operations.
  

Key Takeaways for Traders

• Always check whether the exchange is FIU-registered before trading.

• FIU compliance isn’t optional it’s the difference between a secure platform and one that could vanish overnight.

• Legal clarity means peace of mind in volatile markets.

Staying compliant isn’t just about regulations it’s about reputation, reliability, and readiness for the next wave of crypto growth in India. Trade smart, trade safe.


Author:
Surabh Yadav