FIU-IND fines Binance and notices 25 more offshore crypto platforms

What the Record Shows

The Financial Intelligence Unit-India (FIU-IND) has widened a multi-year compliance drive against offshore cryptocurrency platforms that serve Indian users without registering under the Prevention of Money Laundering Act, 2002 (PMLA). On 1 October 2025 the unit issued compliance notices to 25 further offshore Virtual Digital Asset Service Providers (VDA SPs), among them Paxful, Changelly, BitMEX and Huione, and again wrote to the Ministry of Electronics and Information Technology (MeitY) seeking to block their web addresses in India. The step is recorded in a Press Information Bureau release dated 1 October 2025 (PRID 2173758).

That notice sits on top of an earlier action that has already been adjudicated. By an order dated 19 June 2024 (Order in original No. 10/DIR/FIU-IND/2024), the Director, FIU-IND imposed a penalty of Rs 18.82 crore on Binance under Section 13 of the PMLA, finding that the exchange had operated as a reporting entity without meeting its obligations under Section 12(1) read with the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. A separate process saw KuCoin admitted as a registered VDA SP after paying a smaller penalty.

The genesis was December 2023, when FIU-IND issued compliance show-cause notices to nine offshore VDA SPs - Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex - and asked MeitY to block their URLs, per the PIB release of 28 December 2023 (PRID 1991372). FIU-IND's stated position is that the "obligation is activity-based and is not contingent on physical presence in India", so an offshore platform serving Indian users must register regardless of where it is incorporated.

Crucially, these are compliance and registration actions. According to their own terms, and per the order dated 19 June 2024, neither the notices nor the penalty order finds that any platform laundered money or defrauded a user; they concern the failure to register and to maintain the anti-money-laundering (AML) controls that Indian law requires of reporting entities.

How It Worked

India brought VDA SPs within the PMLA's ambit through a Gazette notification of 7 March 2023, which classified activities such as the exchange of virtual digital assets for fiat, the transfer of VDAs and the safekeeping of VDAs as activities carried out for or on behalf of another person under the Act. From that date, any entity conducting those activities for Indian users became a reporting entity obliged to register with FIU-IND, appoint a principal officer, run customer due diligence (KYC), keep records and file suspicious-transaction and cash-transaction reports.

Domestic platforms registered relatively quickly. Offshore exchanges, FIU-IND found, largely did not, continuing to serve Indian users while remaining outside the AML and counter-financing-of-terrorism perimeter. Because registration is the gateway to every other obligation, a platform that never registers owes no KYC or suspicious-transaction-reporting duty to Indian authorities on those flows - the specific gap the unit set out to close.

The enforcement sequence ran show-cause notice, then a request to MeitY to block URLs, then - for those that engaged - registration and, where warranted, a penalty. Binance and KuCoin, initially among the nine noticed in December 2023 and blocked in early 2024, subsequently applied and were registered as VDA SPs in 2024. In Binance's case FIU-IND then adjudicated the earlier non-compliance, issuing the Rs 18.82 crore penalty order under Section 13 on 19 June 2024 for breaches of the record-keeping and reporting rules during the period it had operated unregistered.

The 1 October 2025 notices repeat the template against a fresh list of 25 platforms, per the PIB release, with the same twin levers: a compliance notice under the PMLA and a request to MeitY to block access. FIU-IND has framed the whole exercise as bringing activity that touches Indian users inside the reporting net, not as an accusation of laundering against any single named platform.

Who Lost Money

Unlike most matters on this desk, the FIU-IND action carries no headline loss figure, because it is a compliance action rather than a fraud case. No sum is said to have been stolen from users by the platforms, and the orders do not quantify any investor loss.

The exposure here is structural, and it falls on Indian retail crypto users generally. India taxes virtual digital assets heavily - a flat 30 per cent on gains plus 1 per cent tax deducted at source on transfers since the Finance Act 2022 - but licenses nothing: there is no SEBI registration, no RBI authorisation, no capital or client-asset-segregation requirement, and no investor-compensation scheme for crypto. The AML registration that FIU-IND enforces is the only mandatory touchpoint an exchange has with an Indian regulator.

The practical consequence of an offshore platform staying unregistered is that no KYC or suspicious-transaction-reporting duty is owed to Indian authorities on those flows. A user whose money disappears on an unregistered offshore venue has no Indian regulator to turn to before the fact - only a police station afterwards. That gap, rather than any single quantified loss, is what the registration drive is meant to narrow.

Where It Stands Now

As of today, more than 50 VDA SPs are registered with FIU-IND, a figure that has risen steadily since 2023. Binance and KuCoin are now among the registered entities; KuCoin paid a penalty of roughly Rs 35 lakh, and Binance was penalised Rs 18.82 crore by the order of 19 June 2024, after which it resumed its India-facing operations. The 25 platforms noticed on 1 October 2025 are at the notice stage: they have been asked to explain their position and, failing registration, face URL blocking.

A compliance show-cause notice is not a finding of guilt. The platforms named are entitled to respond, to register, and to contest any consequent penalty; a penalty order under Section 13 of the PMLA can be appealed to the Appellate Tribunal under the Act. The notices and orders concern registration and AML-reporting obligations - a compliance notice contains a registration demand, not a finding of guilt, and those named are presumed innocent until the matter is adjudicated. They are not findings that any named platform laundered money or defrauded a user, and due process continues.

What It Means

For an ordinary investor, this episode is a map of just how thin the regulatory floor under crypto is in India. The one enforceable line - AML registration with FIU-IND - is about money-laundering controls, not about whether a platform is solvent, honest or safe with client assets. Registration means an exchange has taken on a KYC and reporting obligation to Indian authorities; it does not mean the state vouches for the platform or guarantees your money.

The concrete, checkable takeaway is simple. Before using any crypto platform, confirm it appears on FIU-IND's public list of registered reporting entities, and remember that even a registered platform carries none of the protections - deposit insurance, client-asset segregation, an investor-compensation fund - that regulated securities or bank deposits carry. The heavy tax treatment of 30 per cent plus 1 per cent TDS applies whether or not the venue is registered.

Readers tracking the wider enforcement landscape can follow the Oquilia enforcement archive; set against SEBI's own penalty-recovery actions and the Supreme Court's rules on how bank-fraud tags are applied, the crypto perimeter shows how differently the licensed financial system and the unlicensed one are policed.

FAQ

What exactly did FIU-IND order?

FIU-IND issued compliance show-cause notices under the PMLA to offshore crypto platforms serving Indian users without registering as reporting entities - nine in December 2023 and 25 more on 1 October 2025 - and asked MeitY to block their URLs. Separately, it imposed a Rs 18.82 crore penalty on Binance by order dated 19 June 2024 for AML record-keeping and reporting breaches.

Does this mean the platforms are guilty of money laundering?

No. A compliance notice, per the PMLA, concerns the failure to register and maintain AML controls; it is not a finding of guilt that any platform laundered money or defrauded users. Those named are presumed innocent until the matter is adjudicated, may register and respond, and any penalty can be appealed to the Appellate Tribunal under the PMLA.

Have Binance and KuCoin been blocked, or are they operating?

Both were among the platforms whose URLs were blocked in early 2024, then registered with FIU-IND later that year and resumed India-facing operations. KuCoin paid a smaller penalty of roughly Rs 35 lakh; Binance was penalised Rs 18.82 crore under the June 2024 order before restarting.

Is crypto legal and regulated in India?

Crypto is legal to hold and trade and is taxed - 30 per cent on gains plus 1 per cent TDS since 2022 - but it is not licensed by any Indian financial regulator. The only mandatory registration is AML registration with FIU-IND; there is no SEBI or RBI authorisation, capital requirement or investor-compensation scheme.

How can I check whether a crypto platform is registered?

FIU-IND publishes the list of registered VDA SP reporting entities on its website, fiuindia.gov.in. Registration signals an AML obligation to Indian authorities; it does not certify the platform's solvency or safety, so it is one check among several, not a guarantee.

Where can I read the official record?

The penalty order against Binance (Order No. 10/DIR/FIU-IND/2024, 19 June 2024) is published on the FIU-IND website, and the compliance-notice actions are recorded in Press Information Bureau releases PRID 1991372 (December 2023) and PRID 2173758 (October 2025).

This report is based on the FIU-IND penalty order against Binance dated 19 June 2024 and Press Information Bureau releases PRID 1991372 and PRID 2173758, reviewed on 29 July 2026.