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The crypto landscape in India remains a grey area, with the Asian superpower yet to establish a comprehensive crypto regulation framework. However, recent developments indicate that India is moving toward stricter oversight of the cryptocurrency industry.
The Financial Intelligence Unit of India (FIU-IND) has ordered all crypto exchanges operating in the country to update their users’ Know Your Customer (KYC) details by June 30, 2025. This move is seen as part of India’s broader efforts to strengthen crypto regulation and ensure tax compliance.
Why the FIU Is Updating KYC Rules
According to reports, a Financial Intelligence Unit investigation revealed that several users and exchanges were not adhering to the 1% TDS (Tax Deducted at Source) rules applicable to crypto transactions. To address this, the FIU-IND mandated that all crypto exchanges must reverify and update user accounts to prevent violations of the Prevention of Money Laundering Act.
June 30 Deadline: What Crypto Users and Exchanges Need to Do
Crypto exchanges must now request users to reverify their KYC details, including submitting essential information such as their Permanent Account Number (PAN), before the June 30 deadline. Failure to comply may lead to regulatory action.
Crypto Industry’s Reaction
Leading global and local exchanges, including Binance, have already begun notifying users about the KYC re-verification process. Local blockchain advocacy group Bharat Web3 Association welcomed the FIU-IND’s directive, stating that it would enhance transparency and security in the sector.
Edul Patel, CEO of Mudrex, emphasized the importance of educating users about tax obligations alongside KYC compliance, highlighting a growing focus on responsible crypto usage.
India’s Broader Crypto Regulation Efforts
Despite the FIU’s action, India’s overall crypto regulation framework is still under development. The Reserve Bank of India is reportedly preparing a discussion paper that will outline the government’s approach toward regulating the crypto sector.
Industry leaders like Sudhakar Lakshmanaraja view the recent FIU move as a positive sign, suggesting that India is serious about creating a clear and structured crypto regulatory environment.
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