Offshore crypto exchanges in India sit under the same anti-money-laundering law as Indian ones. An exchange based in Seychelles, Singapore or the Cayman Islands that serves Indian users must register with the Financial Intelligence Unit-India (FIU-IND) as a reporting entity, and since December 2023 FIU-IND has used notices, penalties and URL takedowns against platforms that did not. On 9 September 2026 it named 15 more.
This explainer sets out the rule, what FIU-IND has done so far and what an Indian user of a foreign platform should check.
The rule: activity, not address
The government brought virtual digital asset service providers (VDA SPs) under the Prevention of Money Laundering Act, 2002 (PMLA) in March 2023. The covered activities are exchanging crypto for rupees or other currencies, exchanging one crypto-asset for another, transferring crypto, and holding or administering it for customers.
The Ministry of Finance’s press release of 28 December 2023 states the point that matters for offshore platforms: the obligation “is activity-based and is not contingent on physical presence in India”. A platform that onboards Indian customers is a reporting entity whether or not it has an office here. It must register with FIU-IND, run KYC, keep records and report suspicious transactions. How registration works, and how to check a claim of it, is covered in our guide to FIU-registered crypto exchanges in India.
Four rounds of enforcement
FIU-IND has announced three waves of notices to offshore platforms and a set of penalty orders. Each notice is issued under section 13 of the PMLA, which lets the FIU-IND Director call on a reporting entity to explain its non-compliance and then impose a penalty or other directions.
| Date | Action | Named platforms |
|---|---|---|
| 28 December 2023 | Show cause notices to nine offshore VDA SPs; FIU-IND asks MeitY to block their URLs | Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, Bitfinex |
| 22 March 2024 to 6 March 2025 | Penalty and warning orders under section 13 | KuCoin, Binance, Bybit, Coinbase (see below) |
| 1 October 2025 | Notices to 25 offshore VDA SPs, plus takedown notices for their apps and URLs | Includes Huione, BC.game, Paxful, Changelly, CEX.IO, LBank, BingX, BitMEX, Poloniex, Phemex |
| 9 September 2026 | Notices to 15 VDA SPs, plus app and URL takedown notices | Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT, Guardarian |
Sources: Ministry of Finance press releases of 28 December 2023, 1 October 2025 and 9 September 2026; FIU-IND compliance orders.
The legal route for blocking has changed over time. In 2023 the FIU-IND Director wrote to the Secretary of the Ministry of Electronics and Information Technology (MeitY) asking for the URLs to be blocked. The 2025 and 2026 releases say the Director issued takedown notices directly under section 79(3)(b) of the Information Technology Act, 2000; the September 2026 release describes the Director as the nodal officer for this, acting with rule 3(1)(d) of the IT intermediary rules as amended in 2025.
What the penalty orders say
FIU-IND publishes short summaries of its section 13 orders. Four concern offshore crypto platforms:
- KuCoin (Peken Global Limited): penalty of ₹34.5 lakh, order of 22 March 2024, for breaching section 12(1) of the PMLA read with rule 7 of the PML Rules.
- Binance: penalty of ₹18.82 crore, order of 19 June 2024, after the December 2023 notice. The order lists three Binance entities, in Seychelles, the Cayman Islands and Switzerland.
- Bybit (Bybit Fintech Limited): penalty of ₹9.27 crore, order of 31 January 2025, after a notice of 7 May 2024. The Ministry of Finance said Bybit kept expanding in India without registering and that FIU-IND had its websites blocked through MeitY.
- Coinbase (Coinbase India Private Limited and Coinbase Inc.): a warning rather than a penalty, order of 6 March 2025. The summary says the company missed the statutory timeline but kept corresponding with FIU-IND and then ceased its operations in India.
Each order also directs the platform to comply with Chapter IV of the PMLA and the record-keeping rules. FIU-IND adds that its summaries are representational and carry no legal weight of their own, so the order date and outcome are what to rely on, not a headline.
Registered platforms are growing too
Enforcement has run alongside registration. FIU-IND said 31 VDA SPs had registered by 28 December 2023 and 50 by 1 October 2025. The September 2026 release did not give a new figure. A name on a notice list records a dated proceeding; it does not tell you the platform’s position today, because some platforms registered later and others left. Check the current status yourself, using the method in our FIU registration guide.
What this means if you use a foreign exchange
The notices and orders are aimed at the service providers; none of them describes an offence by users. The practical risks still fall on you:
- Access can stop. A takedown notice is aimed at the platform’s app and URLs for public access in India. Keep withdrawal routes and records in mind before you deposit.
- No regulator stands behind you. The 2025 and 2026 releases repeat the government’s warning that crypto products and NFTs are unregulated, can be highly risky, and that “there may be no regulatory recourse for any loss from such transactions”. Whether crypto is legal at all is a separate question, answered in Is crypto legal in India?.
- Tax still applies. Gains on a foreign platform are taxed the same way as on an Indian one, as set out in our crypto tax guide, and each transaction goes into Schedule VDA. India has also written the crypto asset reporting framework into its tax law, which is designed to bring data from platforms abroad to the Indian tax department once exchange agreements are in place.
- KYC is the same. A registered offshore platform must collect the documents described in our crypto KYC guide. A platform that lets Indian users trade without them is a warning sign, not a convenience.
A quick check before you deposit
- Find the legal entity in the platform’s terms, not just the brand.
- Search the FIU-IND compliance orders and the Ministry of Finance releases for that entity.
- Ask the platform for its FIU-IND registration reference; a registered entity should be able to give it.
- Keep dated screenshots of your balances and transaction history in case access is cut.
Sources
Ministry of Finance (PIB) press releases: FIU IND issues compliance show cause notices to nine offshore VDA SPs, 28 December 2023; FIU-IND imposes monetary penalty of Rs. 9 crore 27 lakhs on Bybit Fintech Limited, 31 January 2025; FIU IND issues notices for non-compliance to 25 offshore VDA SPs, 1 October 2025; FIU-IND issues notices for non-compliance to 15 VDA SPs, 9 September 2026. FIU-IND order summaries 08/DIR/FIU-IND/2024 (22 March 2024), 10/DIR/FIU-IND/2024 (19 June 2024), 15/DIR/FIU-IND/2024 (31 January 2025) and 16/DIR/FIU-IND/2024 (6 March 2025). Documents consulted on 19 October 2026.
