India shuts down 25 illegal crypto exchanges over money laundering and financial terrorism breach
WHEN
India’s financial watchdog, the Financial Intelligence Unit-India (FIU-IND), has issued non-compliance notices to 25 offshore cryptocurrency exchanges that failed to register and adhere to the country’s stringent Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) obligations.
The law, which is under the Prevention of Money Laundering Act (PMLA), has prompted the regulator to order an immediate withdrawal of the exchanges’ websites and mobile applications from public access in India.
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According to data from CoinMarketCap, 14 out of the 25 exchanges, including BingX, LBank, CoinW, ProBit Global, BTCC, AscendEX, Zoomex, and Poloniex, hold more than $9 billion in assets and recorded about $20 billion in trading volume over the past 24 hours.
The affected exchanges, which include BingX, LBank, CoinW, and ProBit Global, have yet to publicly comment on the notices.
Regulatory context and compliance history
This broad crackdown stems from a change enacted in March 2023 when India’s Finance Ministry mandated that all Virtual Asset Service Providers (VASP), including crypto exchanges, fall under the scope of the Prevention of Money Laundering Act (PMLA), 2002.
This ruling requires any exchange serving Indian users, regardless of its physical location, to register with the FIU-IND and meet its strict reporting and compliance standards.
According to the ministry, roughly 50 crypto exchanges have successfully registered with the anti-money laundering agency to date.
The FIU-IND has previously targeted several major global players. Platforms like OKX chose to exit the Indian market last year following initial regulatory pressure.
However, other heavyweights, including Binance, Coinbase, and KuCoin, have since reversed course, registering with the FIU-IND in recent months to become compliant and legally resume operations.
Binance officially relaunched its services in India in August 2024, and Coinbase re-entered the country earlier this year, recently launching an early-access program for pre-signed users.
What does this mean to the cryptocurrency world?
The massive regulatory action taken by India’s Financial Intelligence Unit (FIU-IND) against 25 global crypto exchanges is not an attack on the crypto industry; it is a forceful declaration that the era of unregulated operations is over.
By ordering these offshore platforms which reportedly manage billions in assets to shut down or face blocking, India is drawing a clear line to participate legally or be locked out.
The exchanges were targeted for failing to register as “reporting entities” under the Prevention of Money Laundering Act (PMLA), a requirement implemented in March 2023. This law mandates that all platforms serving Indian customers, domestic or foreign, must adhere to strict Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
The new reality: Compliance equals market access
The crackdown fundamentally reshapes India’s digital asset market, with major consequences for both local companies and investors. This action is a huge boost for the roughly 50 exchanges that have already registered with the FIU-IND.
When illegal platforms are shut down, the users and their trading volumes must move to legal, compliant alternatives. This increases the market share, deposits, and overall legitimacy of platforms like CoinDCX, WazirX, Binance, and Coinbase, which have successfully completed the rigorous registration process. Compliance has become the ultimate competitive advantage.
For the average Indian crypto investor, this is a positive move toward a safer ecosystem. By forcing exchanges to implement strong KYC and record-keeping, the government is reducing the risk of being exposed to scams, hacks, or funds being used for illicit purposes.
Therefore, using an unregistered exchange puts your money and legal standing at risk, including potential complications with India’s high crypto tax laws. For any global crypto company hoping to tap into the massive Indian market in the future, paying penalties and getting fully PMLA-compliant is now the only viable path.
