FIU-IND Establishes June 30 Deadline for Cryptocurrency Compliance
The Financial Intelligence Unit of India (FIU-IND) has mandated that all cryptocurrency exchanges in the country verify their users’ Know Your Customer (KYC) data by the end of June 2025. This directive requires exchanges to refresh KYC details that are older than 18 months, aiming to ensure accurate records of crypto holders and to identify those who may be violating national tax laws. The move comes amid concerns that many users and exchanges are neglecting the one percent Tax Deducted at Source (TDS) on crypto transactions.
Strengthening Compliance Measures
The FIU’s recent directive highlights its commitment to enhancing compliance within the cryptocurrency sector. According to reports, the agency has noticed a significant number of crypto users and exchanges failing to adhere to the TDS deduction law. To address this issue, the FIU plans to intensify its oversight of crypto activities. The Bharat Web3 Association (BWA), an independent advisory body based in New Delhi, has expressed support for this initiative, emphasizing the importance of regulatory accountability in the Virtual Digital Assets (VDA) space. The BWA stated that the FIU-IND’s directive is a crucial step toward fostering a transparent and secure VDA ecosystem in India.
Impact on Crypto Exchanges
All registered Virtual Digital Asset exchanges are now required to enhance their KYC compliance by June 30, 2025, as mandated by the FIU under the Prevention of Money Laundering Act (PMLA). This includes updating user data and re-verifying accounts that are older than 18 months. Mudrex CEO Edul Patel highlighted the responsibility of crypto exchanges to inform their users about tax obligations. He stressed the importance of helping users make informed decisions to remain compliant with the law. This proactive approach aims to create a more informed user base and ensure that exchanges uphold their regulatory responsibilities.
User Re-verification Process
In line with the new regulations, Binance has begun notifying its users in India about the re-verification process via email. Users are now required to submit their Permanent Account Number (PAN), a unique identification number assigned to all taxpayers in India. This step is part of the broader effort to ensure compliance with the updated KYC requirements. The initiative reflects a growing trend among cryptocurrency exchanges to align with regulatory standards and enhance user verification processes.
Future of Crypto Regulation in India
Despite these developments, comprehensive legislation governing the cryptocurrency sector in India is still in the works. Earlier this year, Reserve Bank of India (RBI) Governor Sanjay Malhotra indicated that the government is preparing a discussion paper to clarify its stance on the crypto industry. Sudhakar Lakshmanaraja, founder of the Web3-focused organization Digital South, noted that these proactive measures align India with global regulatory practices. He believes that such steps will foster greater confidence among stakeholders and demonstrate India’s commitment to responsibly embracing the digital asset space.
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