{"id":353747,"date":"2026-01-12T12:37:46","date_gmt":"2026-01-12T07:07:46","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=353747"},"modified":"2026-01-12T12:37:46","modified_gmt":"2026-01-12T07:07:46","slug":"guidelines-for-cryptocurrency-exchanges-by-fiu","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/guidelines-for-cryptocurrency-exchanges-by-fiu\/","title":{"rendered":"Guidelines for Cryptocurrency Exchanges by FIU"},"content":{"rendered":"<p><strong>News<\/strong>&#8211; The Financial Intelligence Unit\u2013India (FIU-IND) issued updated Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) guidelines on 8 January, tightening Know Your Customer (KYC) norms for cryptocurrency \/ virtual digital asset (VDA) exchanges operating in India.<\/p>\n<h2>Key highlights of the new FIU guidelines<\/h2>\n<p data-start=\"562\" data-end=\"608\"><strong data-start=\"566\" data-end=\"608\">1. Mandatory registration with FIU-IND<\/strong><\/p>\n<ul>\n<li data-start=\"611\" data-end=\"774\">All <strong data-start=\"615\" data-end=\"669\">cryptocurrency exchanges and\u00a0 virtual digital asset service providers<\/strong> must register as \u201cReporting Entities\u201d under the Prevention of Money Laundering Act (PMLA), 2002.\n<ul>\n<li data-start=\"777\" data-end=\"849\">FIU-IND is the single-point regulator for crypto exchanges in India.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong data-start=\"860\" data-end=\"914\">2. Enhanced KYC &amp; Client due diligence (CDD) norms<\/strong><\/p>\n<p data-start=\"915\" data-end=\"957\">Crypto exchanges must mandatorily collect:<\/p>\n<ul>\n<li data-start=\"961\" data-end=\"995\">Permanent Account Number (PAN)<\/li>\n<li data-start=\"998\" data-end=\"1032\">Selfie with liveness detection<\/li>\n<li data-start=\"1035\" data-end=\"1109\">Geographical coordinates (latitude &amp; longitude) of onboarding location<\/li>\n<li data-start=\"1112\" data-end=\"1146\">Date &amp; timestamp of onboarding<\/li>\n<li data-start=\"1149\" data-end=\"1179\">IP address of the customer<\/li>\n<li data-start=\"1182\" data-end=\"1215\">Verified bank account<\/li>\n<\/ul>\n<p data-start=\"1320\" data-end=\"1363\"><strong>3. Penny-Drop Verification Mandated<\/strong><\/p>\n<ul data-start=\"1364\" data-end=\"1440\">\n<li data-start=\"1364\" data-end=\"1440\">\n<p data-start=\"1366\" data-end=\"1440\">Bank account verification using the \u2018penny-drop\u2019 method is compulsory.<\/p>\n<table style=\"width: 100%; border-collapse: collapse; border-style: solid; background-color: #f2ebeb;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\">\n<div class=\"flex flex-col text-sm pb-25\">\n<article class=\"text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]\" dir=\"auto\" tabindex=\"-1\" data-turn-id=\"request-WEB:99b3ebb7-3336-426c-a682-b8420d0d3cff-21\" data-testid=\"conversation-turn-44\" data-scroll-anchor=\"true\" data-turn=\"assistant\">\n<div class=\"text-base my-auto mx-auto pb-10 [--thread-content-margin:--spacing(4)] @w-sm\/main:[--thread-content-margin:--spacing(6)] @w-lg\/main:[--thread-content-margin:--spacing(16)] px-(--thread-content-margin)\">\n<div class=\"[--thread-content-max-width:40rem] @w-lg\/main:[--thread-content-max-width:48rem] mx-auto max-w-(--thread-content-max-width) flex-1 group\/turn-messages focus-visible:outline-hidden relative flex w-full min-w-0 flex-col agent-turn\" tabindex=\"-1\">\n<div class=\"flex max-w-full flex-col grow\">\n<div class=\"min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal [.text-message+&amp;]:mt-1\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"a6e1d615-70da-4b3a-b6a2-73ea3cea98a3\" data-message-model-slug=\"gpt-5-2\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[1px]\">\n<div class=\"markdown prose dark:prose-invert w-full break-words light markdown-new-styling\">\n<p><strong>What is Penny Drop Verification?<\/strong><\/p>\n<ul>\n<li data-start=\"51\" data-end=\"194\">It is a <strong data-start=\"77\" data-end=\"113\">bank account verification method<\/strong> where a <strong data-start=\"122\" data-end=\"151\">small amount (usually Rs. 1)<\/strong> is deposited to confirm account ownership.<\/li>\n<li data-start=\"199\" data-end=\"342\"><strong data-start=\"199\" data-end=\"211\">Process: <\/strong>A micro-deposit is sent using the account number and IFSC, and the bank returns the registered account holder\u2019s name.<\/li>\n<li data-start=\"347\" data-end=\"436\"><strong data-start=\"347\" data-end=\"364\">Verification: <\/strong>The returned name is matched with KYC\/PAN details of the user.<\/li>\n<li data-start=\"441\" data-end=\"566\"><strong data-start=\"441\" data-end=\"453\">Purpose:<\/strong>It helps prevent fraud, fake accounts, and money laundering, and ensures secure financial transactions.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/li>\n<\/ul>\n<p data-start=\"1867\" data-end=\"1921\">4. <strong>Restrictions on high-risk Crypto activities<\/strong><\/p>\n<p data-start=\"1922\" data-end=\"1989\">The guidelines <strong data-start=\"1937\" data-end=\"1960\">explicitly prohibit<\/strong> exchanges from facilitating:<\/p>\n<ul>\n<li data-start=\"1993\" data-end=\"2053\">Tumblers and mixers (used to obscure transaction trails)<\/li>\n<li data-start=\"2056\" data-end=\"2086\">Anonymity-enhancing tokens<\/li>\n<li data-start=\"2089\" data-end=\"2157\">Transactions designed to hide the origin or destination of funds<\/li>\n<\/ul>\n<p><strong data-start=\"2168\" data-end=\"2206\">5. Discouragement of ICOs and ITOs<\/strong><\/p>\n<p data-start=\"2209\" data-end=\"2266\">Exchanges are discouraged from promoting or facilitating:<\/p>\n<ul>\n<li data-start=\"2271\" data-end=\"2304\">Initial Coin Offerings (ICOs)<\/li>\n<li data-start=\"2309\" data-end=\"2345\">Initial Token Offerings (ITOs)<\/li>\n<\/ul>\n<p data-start=\"2435\" data-end=\"2484\"><strong data-start=\"2439\" data-end=\"2484\">6. Reporting &amp; Record-Keeping obligations<\/strong><\/p>\n<ul>\n<li data-start=\"2487\" data-end=\"2502\">Exchanges must:<\/li>\n<li>Maintain detailed <strong data-start=\"2525\" data-end=\"2545\">customer records<\/strong><\/li>\n<li data-start=\"2550\" data-end=\"2602\">Report <strong data-start=\"2557\" data-end=\"2591\">suspicious transactions (STRs)<\/strong> to FIU-IND<\/li>\n<li data-start=\"2607\" data-end=\"2632\">Monitor risks related to:\n<ul>\n<li data-start=\"2639\" data-end=\"2657\">Money laundering<\/li>\n<li data-start=\"2664\" data-end=\"2685\">Terrorist financing<\/li>\n<li data-start=\"2692\" data-end=\"2717\">Proliferation financing<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Note<\/strong>&#8211;<strong> Legal status of Cryptocurrency in India<\/strong>: Cryptocurrencies are not recognised as legal tender in India but are taxed under the Income-Tax Act. Regulatory oversight is exercised through the Prevention of Money Laundering Act (PMLA), not currency laws.<\/p>\n<h2>About Financial Intelligence Unit \u2013 India (FIU-IND)<\/h2>\n<ul>\n<li data-start=\"3005\" data-end=\"3028\"><strong data-start=\"3005\" data-end=\"3021\">Established:<\/strong> 2004<\/li>\n<li data-start=\"3031\" data-end=\"3072\"><strong data-start=\"3031\" data-end=\"3042\">Nature:<\/strong> Independent national agency<\/li>\n<li data-start=\"3075\" data-end=\"3194\"><strong data-start=\"3075\" data-end=\"3102\">Administrative control:<\/strong> Reports to the <strong data-start=\"3118\" data-end=\"3157\">Economic Intelligence Council (EIC)<\/strong> headed by the <strong data-start=\"3172\" data-end=\"3192\">Finance Minister<\/strong><\/li>\n<li data-start=\"3197\" data-end=\"3210\"><strong data-start=\"3197\" data-end=\"3210\">Function:<\/strong>\n<ul>\n<li data-start=\"3215\" data-end=\"3304\">Receives, analyses, and disseminates information on <strong data-start=\"3267\" data-end=\"3304\">suspicious financial transactions<\/strong><\/li>\n<li data-start=\"3309\" data-end=\"3403\">Coordinates national &amp; international efforts against <strong data-start=\"3362\" data-end=\"3403\">money laundering and terror financing<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News&#8211; The Financial Intelligence Unit\u2013India (FIU-IND) issued updated Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) guidelines on 8 January, tightening Know Your Customer (KYC) norms for cryptocurrency \/ virtual digital asset (VDA) exchanges operating in India. Key highlights of the new FIU guidelines 1. Mandatory registration with FIU-IND All cryptocurrency exchanges and\u00a0 virtual&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/guidelines-for-cryptocurrency-exchanges-by-fiu\/\">Continue reading <span class=\"screen-reader-text\">Guidelines for Cryptocurrency Exchanges by FIU<\/span><\/a><\/p>\n","protected":false},"author":10367,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872],"class_list":["post-353747","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/353747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10367"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=353747"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/353747\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=353747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=353747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=353747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}