India’s FIU and Global Regulatory Trends Against Crypto Exchanges

India’s Financial Intelligence Unit (FIU) has taken a defining stance against the cryptocurrency industry, seeking a ban on nine major crypto exchanges, including Binance and Kraken. The FIU, a body that monitors financial activities for illicit operations, has cited the exchanges’ failure to register with the FIU and comply with anti-money laundering (AML) and anti-terrorist financing regulations as grounds for this action. The FIU has thus requested the Ministry of Electronics and Information Technology to block the websites of these exchanges until they comply with the regulatory requirements.

Aligning with Global Regulatory Trends

This move by the FIU aligns with an increasing global trend where national governments are scrutinizing and taking action against major crypto exchanges for regulatory non-compliance. Notably, the U.S. Department of Justice announced that Binance, one of the world’s largest crypto exchanges, will exit the U.S. market and pay a hefty $4.3 billion fine. This fine is one of the largest corporate penalties in U.S. history, settling charges of anti-money laundering and sanctions violations.

Leadership Changes and Penalties

Binance’s CEO, Changpeng Zhao, has also resigned from his position after pleading guilty to related charges. In addition to the corporate penalty, Zhao has agreed to pay a separate $50 million fine. The saga represents a pivotal moment in the global cryptocurrency regulatory landscape, demonstrating that even influential industry leaders are not immune to law enforcement.

Regulatory Landscape and Crypto Security

The regulatory environment for cryptocurrency continues to evolve as governments worldwide grapple with the risks associated with the industry. In another significant development, a federal judge ruled that Terraform Labs and its founder, Do Kwon, sold unregistered securities, further complicating the industry’s reputation. On a positive note, reports indicate a decline in incidents of crypto-related hacks and exploits in 2023 compared to the previous year, suggesting that security measures are gradually improving within the industry.