On October 1, 2025, India’s Financial Intelligence Unit (FIU-IND), operating under the Finance Ministry, sent show-cause notices to 25 offshore cryptocurrency exchanges. The notices allege failure to comply with anti-money laundering (AML) obligations under the Prevention of Money Laundering Act, 2002 (PMLA).
These exchanges were directed to explain their operations, registration status, customer records, and adherence to compliance norms. Some notices also invoked provisions under the Information Technology Act to demand takedowns of websites and apps accessible in India.
Which Exchanges Are Targeted?
The list includes several well-known offshore platforms:
- Huione
- CEX.IO
- BingX
- CoinW
- BTCC
- Changelly
- Paxful
- LBank
- PrimeXBT
- Coinex
- Remitano
- Poloniex
- BitMex
- LCX
…among others. ETCFO.com+2Moneycontrol+2
These are exchanges that serve Indian users, even though they are not physically based in India. The government emphasizes that registration with FIU-IND and compliance is mandatory, regardless of geographical location.
Why This Move?
1. Enforcing AML / KYC Standards
These notices are part of India’s ongoing effort to tighten oversight over virtual assets and curb illicit flows through crypto platforms. Exchanges must maintain records, monitor suspicious transactions, and report as per PMLA norms.
2. Legitimacy & Control
Authorities are asserting that even offshore exchanges must align with India’s regulatory framework if they cater to Indian users. Compliance is “activity-based,” not contingent on physical presence. Moneycontrol
3. Takedown Demands
The notices also require removal of apps/websites within India that violate compliance mandates.
4. Reminder & Precedent
This is not entirely new: India had earlier issued show-cause notices to 9 offshore exchanges. This newer batch of 25 indicates escalation.
Consequences & Risks
- Exchanges that fail to respond satisfactorily may face blocking of URLs, fines, or further legal action under PMLA. Moneycontrol
- Indian users of these platforms may see service disruptions, especially in cases where exchanges are asked to delist or shut access within India.
- The move may push offshore exchanges to either fully register under Indian norms or retreat from the Indian market.
- Domestic exchanges (already registered with FIU-IND) may come under relatively more favor, as regulatory pressure intensifies on offshore competitions.
What This Means for the Crypto Ecosystem in India
- Regulatory clarity vs crackdown: While India has been gradually working on crypto rules, this action shows the government is ready to enforce aggressively.
- Compliance burden for exchanges: Offshore platforms will need to invest in Indian AML/KYC, reporting infrastructure if they wish to continue operations.
- Investor caution: Retail users will have to be more careful about using offshore exchanges, considering legal and operational risks.
- Power shift: The move may tilt advantage toward Indian exchanges that are already compliant and embedded in local systems.
