India's Crypto Businesses Handed Anti-Money Laundering Obligations for First Time

India has added crypto to anti-money laundering rules, making crypto exchanges, NFT marketplaces and custody service wallet providers legally responsible for monitoring suspicious financial activities for the first time.

The businesses will have to register with the Financial Intelligence Unit (FIU) and comply with other mandatory processes under the Prevention of Money Laundering Act (PMLA), the Ministry of Finance said Tuesday.

While India doesn't have a regulatory body dedicated to crypto, the move hands the FIU a significant role in overseeing crypto in India. Until now, crypto businesses were not legally obligated to perform verification processes like Know Your Customer (KYC). This has been written into the law and thus becomes mandatory.

They will also have to report suspicious activities to the FIU voluntarily and must designate a Money Laundering Reporting Officer (MLRO) to ensure compliance with the act.