India Crypto Exchange Compliance Checker
Quick Takeaways
- OnOct12025 FIU‑IND ordered 25 offshore crypto platforms to shut down their Indian URLs.
- Indian crypto traders must use only FIU‑registered Virtual Digital Asset Service Providers (VDASPs) or risk legal penalties.
- All crypto gains are taxed at a flat30% plus 1% TDS on every transfer.
- RBI, Ministry of Finance and SEBI each play a distinct role in the evolving regulatory framework.
- Work‑arounds like VPNs violate the PMLA and can trigger AML investigations.
Imagine you’ve just spotted a promising altcoin on a global exchange, hit “Buy”, and then the app suddenly disappears from your phone. That’s the reality for many Indian crypto fans after the government’s latest crackdown. The move isn’t a blanket ban - crypto itself is still legal - but the rules around who can offer services to Indian users have tightened dramatically. Below we break down what the new crypto exchange restrictions India actually mean for you, how the different watchdogs fit together, and what steps you can take to stay on the right side of the law.
Regulatory Landscape in a Nutshell
Cryptocurrency exchange restrictions in India are a set of compliance and enforcement actions issued by Indian authorities to control how offshore platforms serve Indian residents. The rules sit on top of a patchwork of existing laws - the Prevention of Money Laundering Act (PMLA), RBI directives, and tax statutes - all of which paint a picture of heavy regulation without an outright ban.
The FIU‑IND Crackdown Explained
Financial Intelligence Unit - India (FIU‑IND) is the national agency tasked with implementing AML/CFT (anti‑money‑laundering and counter‑terrorism financing) measures. On 1October2025 it served show‑cause notices to 25 offshore exchanges - including Huione, Paxful, CEX.IO, Coinex, BitMex, Bitrue, CoinCola, Changelly and BingX - for failing to register under the PMLA. The agency then ordered the removal of their apps and website URLs from Indian app stores and DNS resolvers.
This isn’t the first time FIU‑IND has acted. A similar notice in 2023 targeted nine big names such as Binance and KuCoin. The pattern shows a clear intent: any platform that lets Indian users trade without a local registration will be blocked.
Why the Prevention of Money Laundering Act Matters
Prevention of Money Laundering Act (PMLA) 2002 is India’s core AML legislation. It requires anyone facilitating the exchange of virtual assets for fiat to be a “reporting entity.” Failure to register triggers penalties ranging from fines to criminal prosecution. The FIU‑IND notices cite non‑compliance with the PMLA as the legal basis for takedowns.
Importantly, the PMLA’s reach is activity‑based, not location‑based. Even if a company lives outside India, if it offers services to Indian residents it must register with FIU‑IND and comply with reporting, record‑keeping, and transaction monitoring obligations.
Key Regulators and Their Stances
Reserve Bank of India (RBI) has consistently warned about crypto’s volatility and its potential macro‑economic impact. While the RBI does not ban crypto, it barred banks from handling crypto‑related transactions back in 2018 - a ban later overturned by the Supreme Court in 2020. The central bank now focuses on overseeing the emerging central bank digital currency (CBDC) and nudging the market toward regulated finance.
Ministry of Finance (MoF) shapes the tax and policy framework. It introduced a flat 30% tax on all crypto gains and a 1% tax deducted at source (TDS) on every transfer. The ministry is also drafting a bill that could outright ban private cryptocurrencies, though that bill has not reached Parliament yet.
Securities and Exchange Board of India (SEBI) sees crypto as a financial instrument that could fall under its purview. SEBI has advocated for a multi‑regulator model, suggesting that both securities laws and AML rules should govern crypto trading. While SEBI has not yet issued binding regulations, its stance signals a possible future where crypto assets receive a securities‑style oversight.
Who Must Register? The Role of VDASPs
Virtual Digital Asset Service Provider (VDASP) is the legal label for any entity that exchanges, transfers, holds, or facilitates control over virtual assets. As of October2025, roughly 50 VDASPs are registered with FIU‑IND. Registration obliges them to:
- Maintain detailed transaction logs for at least five years.
- Report suspicious activities to FIU‑IND within the statutory timeline.
- Implement KYC (Know Your Customer) and AML checks for every Indian user.
Non‑registered platforms are now effectively black‑listed for Indian users, and accessing them via VPN could be deemed a violation of the PMLA.
Taxation: The 30% Flat Rate and the 1% TDS
Crypto income in India is taxed at a rigid 30% flat rate regardless of the holding period. This applies to capital gains, business profits, and any other income derived from virtual assets. The tax is levied on the net profit after deducting transaction costs.
In addition, the government introduced a 1% Tax Deducted at Source (TDS) on every crypto transaction above ₹10,000. The TDS is collected by the exchange on the buyer’s side and credited to the government’s coffers. For high‑frequency traders, this effectively raises the cost of each trade and can erode margins.
Failure to pay TDS can trigger penalties, and the tax authority (CBDT) now cross‑checks exchange‑reported TDS data with individual tax returns, making evasion increasingly risky.
What the Blocked Exchanges Look Like
The latest FIU‑IND order targeted 25 platforms. Some of the most recognizable names include:
- Huione
- Paxful
- CEX.IO
- Coinex
- BitMex
- Bitrue
- CoinCola
- Changelly
- BingX
These exchanges offered deep liquidity, advanced derivatives, and lower fees - benefits that Indian traders now lose unless they switch to a registered platform. The takedown orders forced app‑store removals and DNS blocks, meaning the apps simply won’t load on Indian IP addresses.
How to Trade Legally in India
If you want to stay compliant, follow these steps:
- Choose a VDASP that appears on FIU‑IND’s public registry (e.g., WazirX, CoinDCX, ZebPay).
- Complete KYC using a PAN card, Aadhaar, and proof of address.
- Verify that the exchange deducts the 1% TDS automatically on each trade.
- Maintain your own transaction ledger - most exchanges now provide downloadable CSVs.
- File the 30% crypto tax when filing your FY return; include the TDS certificates as proof of tax paid.
Many registered exchanges also offer fiat on‑ramps via UPI, making bank transfers seamless. While liquidity may be lower than on global platforms, the trade‑off is regulatory safety.
Risks of Going Around the Block
Using a VPN or proxy to access a blocked exchange might seem tempting, but it carries real dangers:
- Violation of the PMLA can lead to fines up to ₹10crore or imprisonment for up to five years.
- Unregistered platforms often lack robust KYC, exposing users to fraud and theft.
- Any assets moved through a black‑listed exchange could be frozen if authorities issue a court order.
In short, the short‑term convenience is outweighed by long‑term legal and financial risk.
Comparison: Compliant vs Non‑Compliant Exchanges
| Feature | Registered (FIU‑IND compliant) | Blocked (non‑registered) |
|---|---|---|
| Legal status for Indian users | Allowed - must follow KYC, AML, tax rules | Prohibited - access blocked, legal exposure |
| Liquidity (average daily volume) | Medium - 0.5‑1billionUSD | High - 5‑10billionUSD (global) |
| Fee structure | Higher maker/taker fees (0.1‑0.2%) + 1% TDS | Lower fees (0.04‑0.07%) - no TDS |
| Regulatory oversight | FIU‑IND reporting, RBI monitoring | None - outside Indian jurisdiction |
| Risk of account freeze | Low - compliant platforms cooperate with authorities | High - possible seizure if caught |
Checklist for Indian Crypto Traders
- Verify exchange registration on the FIU‑IND portal.
- Complete full KYC (PAN, Aadhaar, bank link).
- Ensure the platform deducts 1% TDS automatically.
- Keep a personal ledger of every buy, sell, and transfer.
- Report crypto income in the FY return; attach TDS certificates.
- Avoid VPNs or any method that hides your IP from Indian authorities.
- Stay updated on new FIU‑IND notices - they’re issued quarterly.
Frequently Asked Questions
Is cryptocurrency illegal in India?
No. Holding, buying, and selling crypto are legal, but the activities are heavily regulated. You must use FIU‑registered exchanges and pay the 30% tax plus 1% TDS.
Can I still use Binance or KuCoin from India?
Both platforms were blocked in the 2023 FIU‑IND notice and their apps are no longer available in Indian app stores. Accessing them via VPN is considered a PMLA violation.
What does “VDA SP” stand for and why does it matter?
VDASP means Virtual Digital Asset Service Provider. It is the legal classification for any entity that offers crypto exchange, transfer, or custodial services. Registration as a VDASP is mandatory for any platform serving Indian users.
How is the 1% TDS collected?
When you sell crypto on a registered exchange, the platform automatically deducts 1% of the transaction value and remits it to the Income Tax Department. You receive a TDS certificate that you can claim as tax credit.
Will the upcoming crypto‑ban bill affect the current restrictions?
If the bill passes, private cryptocurrencies could be prohibited altogether, rendering even registered exchanges non‑operational. Until then, the current framework of registration, tax, and TDS remains in force.
Bottom line: crypto isn’t outlawed, but the Indian government is demanding that every platform playing in the market play by the rules. Stick with FIU‑registered exchanges, keep clean records, and pay your taxes. That way you can keep trading without fearing a surprise legal knock‑out.
Jared Carline
India’s insistence on sovereign control over digital assets underscores a broader geopolitical strategy; the nation is asserting its regulatory autonomy in a terrain dominated by global platforms. By mandating FIU‑IND registration, the government prevents foreign entities from exploiting Indian users without oversight. This move aligns with a protectionist ethos that prioritizes national economic interests above unfettered market access. Compliance, therefore, is not merely a legal requirement but a demonstration of patriotic responsibility.
raghavan veera
When you sift through layers of law, you find a paradox: freedom is both expanded and constrained by the very rules that promise security. The Indian framework tries to safeguard investors, yet it also curtails the fluidity that crypto thrives on. Think of it as a philosophical contract between the state and the individual-each giving a piece of liberty for collective stability. In practice, that balance feels precarious, especially when offshore platforms disappear overnight.
Danielle Thompson
Stay compliant and the taxes will be your friend 😊
Eric Levesque
India is protecting its own citizens from reckless crypto schemes. The rules may seem strict, but they keep foreign influence in check. Follow the registered exchanges and you’re doing the right thing.
alex demaisip
The 2025 regulatory overhaul constitutes a multidimensional shift in the Indian crypto ecosystem, precipitated by an amalgamation of AML imperatives and fiscal policy realignments. First, the Financial Intelligence Unit-India (FIU‑IND) has operationalized the Virtual Digital Asset Service Provider (VDASP) taxonomy, thereby delineating a clear legal boundary for entities that facilitate digital asset transactions. Second, the enforcement mechanism leverages the Prevention of Money Laundering Act (PMLA) as a statutory backbone, mandating exhaustive KYC, transaction logging, and continuous suspicious activity reporting. Third, the 30% flat tax regime, coupled with an automated 1% Tax Deducted at Source (TDS), introduces a fiscal overlay that directly impacts liquidity on compliant platforms. Fourth, the blocked offshore exchanges list functions as a de‑facto exclusionary barrier, effectively severing access to high‑volume markets and arbitrage opportunities previously available to Indian traders. Fifth, the compliance verification tool embedded within the post serves as a real‑time oracle, enabling end‑users to differentiate between sanctioned and prohibited entities. Sixth, the regulatory narrative underscores a shift from a laissez‑faire posture to a state‑centric, risk‑mitigation paradigm. Seventh, the policy convergence among RBI, Ministry of Finance, and SEBI signals an impending harmonization of monetary, tax, and securities oversight, which may culminate in an integrated supervisory framework. Eighth, the operational impact on market participants includes heightened due‑diligence costs, increased onboarding friction, and potential erosion of trading margins due to TDS deductions. Ninth, from a macro‑economic perspective, the legislation aims to curtail capital flight while fostering a controlled environment for digital asset innovation. Tenth, stakeholders must recalibrate strategic roadmaps to align with these regulatory vectors, lest they incur punitive exposure under the PMLA.
Elmer Detres
Hey folks, let’s keep it simple: if you want to stay on the right side of the law, pick a FIU‑registered exchange. They’ve already built the KYC and TDS pipelines, so you won’t have to reinvent the wheel. 📈 Remember, the tax paperwork can be a pain, but the exchange will hand you a TDS certificate you can upload with your return. Keep a personal ledger too-trust me, future‑you will thank present‑you. Stay safe and keep trading responsibly! 🙌
Tony Young
⚡️ The new crackdown feels like a seismic tremor shaking the crypto market! ⚡️ Yet, it also lights the path for regulated growth, turning chaos into order. Exchanges that comply now wear a badge of legitimacy-think of it as a badge of honor. 🎭 So, grab your compliant platform and ride the wave; the storm is over, and the sea is calmer.
Fiona Padrutt
India’s stance is crystal clear: protect national interests above all. No foreign exchange can bypass the FIU‑IND mandates without consequences. Align with home‑grown platforms, and you’re supporting the nation’s financial sovereignty.
Briana Holtsnider
The whole “block offshore exchanges” drama is just a smokescreen. Most of these platforms were already riddled with scams. If you’re still chasing low‑fee promises, you’re setting yourself up for disaster.
Corrie Moxon
It’s encouraging to see the market adapting to the new rules. Registering with a compliant exchange not only protects you legally but also builds confidence in the ecosystem. Keep the momentum going, and let’s aim for broader adoption. Remember, staying informed is half the battle won.
Jeff Carson
For anyone still unsure, the FIU‑IND portal lists every registered VDASP-think of it as a public directory. It’s a handy reference when you’re vetting a platform, and it spares you from accidental non‑compliance. 🙂 Also, note that most compliant exchanges now auto‑deduct the 1% TDS, so you won’t have to remember it manually. Stay updated, because the regulator releases notices quarterly, and the list can evolve.
Anne Zaya
Just a heads‑up: if an exchange isn’t on the FIU‑IND list, you should steer clear. It’s as simple as checking the official website before you dive in.
Emma Szabo
Imagine the freedom of trading on a platform that’s both regulated and vibrant-like a bright tapestry woven with compliance threads. When you pick a registered exchange, you’re not only obeying the law, you’re also joining a community that values transparency. Keep your ledger clean, and let the tax authorities see you’re a responsible citizen. Together, we can turn this regulatory wave into a tide of opportunity!
Fiona Lam
Look, the crackdown is just the government flexing its muscles. If you want to keep your crypto game alive, you’ve got to play by the new rules. No more shortcuts, no more loopholes.
OLAOLUWAPO SANDA
Blocking foreign exchanges won’t stop the market; it just pushes it underground. People will always find a way, no matter the restrictions.
Alex Yepes
In accordance with the recent regulatory cadence, it is incumbent upon participants to verify the registration status of any exchange prior to engagement. The FIU‑IND registry serves as an authoritative source, thereby obviating potential ambiguities. Compliance with the 30% flat tax and the ancillary 1% TDS is mandatory, and failure to adhere may result in statutory penalties. Consequently, prudent actors should maintain meticulous transaction records for audit readiness. Adoption of a registered platform not only fulfills legal obligations but also fortifies operational resilience.
Sumedha Nag
Honestly, these bans feel like a power play that doesn’t consider real traders. The market will adapt, but it’ll be messier for everyone.
Holly Harrar
Hey! Just a quick tip – always double check the FIU‑IND list before you sign up, ok? It saves u from alot of headaches later on. Also, keep a copy of your TDS certs, they’re super important for tax filing.
Vijay Kumar
Switching to a compliant exchange is a smart move; you’ll get the benefit of legal clarity and smoother tax reporting. Most registered platforms now provide easy‑to‑download CSV statements for every transaction. Pair that with the automatic 1% TDS deduction, and you’ll have a clean audit trail. Keep your own ledger as a backup, just in case any discrepancies arise.
Edgardo Rodriguez
Consider, for a moment, the intricate tapestry of regulation, tax, and technology; each thread intertwines, creating a fabric that both protects and restricts. The FIU‑IND mandate, while seemingly onerous, offers a scaffold upon which trustworthy exchanges can build; this, in turn, fosters investor confidence. Yet, the 30% flat tax, coupled with a 1% TDS, imposes a fiscal weight that cannot be ignored; it shapes trading strategies, nudging participants toward efficiency. Ultimately, compliance is not merely a legal checkbox-it is a catalyst for a more resilient, transparent market.