B2G and the Future of 7 Crypto Platforms in India

B2G and Crypto Platforms' Return to India

The Finance Ministry's Financial Intelligence Unit (FIU) will reportedly hear the petitions of seven offshore crypto platforms seeking to restart operations in India. Sources told Economic Times that the unit will hear the pleas of crypto exchanges such as Bitfinex, MEXC Global, Kraken, Huobi, Gate.io, Bittrex and Bitstamp later this week.

Before resuming operations, these platforms must address pending goods and services tax (GST), estimated at INR 2,900 Cr. Additionally, compliance with PMLA provisions is crucial, requiring registrations, KYC norms, and reporting of suspicious transactions.

Moreover, GST authorities are considering sending notices to other foreign exchanges that previously operated in India. Banned exchanges may be required to shift their servers to India in accordance with Ministry of Electronics and Information Technology (MeitY) guidelines.

FIU's Role in Crypto Regulations

FIU oversees trade in virtual digital assets (VDA) and ensures compliance with the Prevention of Money Laundering Act (PMLA) and VDA taxation framework. All crypto platforms must register as reporting entities to offer crypto trading services in India.

Last year, the finance ministry issued notices to nine overseas crypto platforms for failing to comply with these provisions, resulting in a swift blocking of their operations in India. For instance, Binance, which was also banned, paid a fine of INR 18 Cr earlier this year, ensuring compliance with local norms before resuming operations.