Total 49 crypto currency exchanges registered with FIU during 2024-25 fiscal: Report

New Delhi: As many as 49 cryptocurrency exchanges, most of them based in India, were registered with the Financial Intelligence Unit (FIU) during the 2024-25 fiscal as part of the country’s efforts to curb money laundering and terrorist financing risks linked to virtual digital assets (VDAs), a government report said.

A strategic analysis of suspicious transaction reports (STRs) submitted by these exchanges revealed instances of crypto funds being exploited for serious criminal activities, including hawala transactions, gambling, scams, fraud, and even the operation of an illegal adult content website.

In legal terms, cryptocurrencies are classified as VDAs, while exchanges dealing in them are referred to as VDA Service Providers (VDA SPs).

These entities were brought under the Prevention of Money Laundering Act (PMLA) reporting framework in 2023, making them reporting entities obligated to furnish STRs to the FIU, which functions under the Union finance ministry.

As reporting entities, VDA SPs are required to identify and disclose beneficial ownership of wallets, monitor crowdfunding initiatives such as initial coin offerings or token offerings, and track transfers between hosted and unhosted wallets.

They must also report suspicious transactions to help prevent misuse of the financial system.

According to the report for FY25, India’s cryptocurrency ecosystem has been evolving rapidly and drawing significant attention due to its perceived potential to transform financial services and create wealth.

However, it cautioned that VDAs and their service providers carry inherent risks because of their global reach, rapid settlement capabilities, peer-to-peer nature and the potential for anonymity that can obscure transaction trails.

Unlike several jurisdictions where multiple regulators oversee crypto platforms, India has designated the FIU as the single authority responsible for registering and monitoring VDA SPs for anti-money laundering and counter-terror financing compliance.

As of March 2025, 49 VDA SPs were registered with the FIU, including 45 onshore exchanges and four offshore entities.

The suspicious transaction reports filed during the year were analysed and categorised under high-risk typologies such as scams and fraud, gambling and peer-to-peer scams.

Some reports were also linked to red flags involving child sexual abuse material, terror financing, darknet services and proceeds of crime, underlining what the FIU described as the growing exploitation of crypto assets for serious criminal activities. Geographic analysis pointed to significant regional concentration of suspicious activity and identified commonly used digital assets in such cases.

During FY25, the FIU imposed penalties totalling Rs 28 crore on certain non-compliant crypto exchanges.

Following registration, exchanges are required to disclose bank and financial institution accounts, appoint designated directors and principal officers, share platform contact details, and implement internal audits, risk-based customer due diligence, sanctions screening and periodic risk assessments.

The report added that India has also addressed crypto-related risks through legislative measures, including taxation of crypto income and withholding tax provisions under the Income-Tax Act.