India tightens crypto regulations to combat financial crime

According to The Register, India's government has updated its regulations for cryptocurrency service providers in an effort to combat fraud, money laundering, and terrorism financing.

The nation's Financial Intelligence Unit (FIU-IND) has issued new guidelines requiring all crypto entities serving Indian residents, including those operating offshore, to register and disclose specific officer details, business locations, and ownership information. Registered entities must implement stringent client due diligence, collecting identity documents, bank account details, occupation, income range, and even latitude/longitude coordinates with timestamps and IP addresses for onboarding. A selfie is also required to verify identity. These measures are deemed necessary due to the anonymous nature of virtual digital asset transactions and their potential misuse by illicit actors. The rules also mandate continuous transaction monitoring and reporting of suspicious activities involving fiat and virtual currencies.

These updated regulations, which align with those for traditional financial institutions, reflect India's response to terrorism threats within its large cryptocurrency investor base. By extending these requirements to offshore entities, India is demonstrating a pattern of imposing significant obligations on tech companies targeting its market. While past attempts to regulate tech firms have faced challenges, the government continues to seek a balance between facilitating useful services and ensuring a competitive landscape for local businesses.

Source: The Register