India has launched its toughest crackdown on crypto to date, blacklisting 25 offshore platforms holding more than $9 billion, including BingX and LBank, for failing to meet anti–money laundering standards.
According to an October 2 release, the country’s finance ministry said the Financial Intelligence Unit-India has already directed the exchanges to disable app and website access within the country.
This comes after India noted that it is leaning towards not creating legislation to regulate cryptocurrencies in the country, instead opting for partial oversight, fearing that bringing digital assets into its mainstream financial system could raise systemic risks, as a government document reveals.
The report cites the Reserve Bank of India’s (RBI) view that, in practice, regulating the risks of cryptocurrencies would be cumbersome.
India put exchanges under the 2002 anti–money laundering law
India’s FIU-IND has issued enforcement notices to 25 exchanges, 14 of which collectively saw $22 billion in trades in just 24 hours, according to CoinMarketCap. Thursday’s enforcement action dates back to a March 2023 decision, in which the state brought crypto service providers under its 2002 anti–money laundering law and mandated that they register with the FIU and submit reports on their activities.
Even so, India has stopped short of enacting a comprehensive crypto law, instead opting for piecemeal oversight. The Reserve Bank of India (RBI) argued as recently as last month that regulating the sector effectively would be extremely challenging. To fill the gap, the country has turned to heavy taxation and compliance, levying a 30% tax on profits as well as a 1% TDS (tax deducted at source) on transactions, which has led to a decline in trading volumes in the country.
The government still permits overseas exchanges to operate if they comply, as highlighted by Bybit resuming service after a ₹9.27 crore fine, equivalent to approximately $1.06 million, under the Prevention of Money Laundering Act (PMLA). To date, over 50 crypto exchanges are registered with the FIU-IND.
On-chain activity grew nearly 70% year over year
Binance, Coinbase, KuCoin, and OKX were all hit with enforcement measures in 2023 and 2024. OKX chose to exit India, while the other exchanges complied with FIU rules and resumed their business. Many platforms had their sites and apps taken down until they complied with the penalties and registration requirements. Binance and KuCoin later restarted, although regulation remains heavy-handed.
Despite the restrictions, Indians are estimated to hold roughly $4.5 billion in digital assets, while regulation limits systemic exposure. The country remains the largest market by transaction volume, supported by grassroots adoption, remittances, and fintech integration.
Japan, although smaller in absolute volume, marked the fastest year-on-year growth of 120% by June 2025, pushed by regulatory reforms, broader investor participation, and increased usage of major digital assets. This growth highlights the diverse adoption models shaping the APAC crypto landscape.
Offshore exchanges continue to view India as a prime market. Chainalysis ranked it No. 1 in global adoption for the third year straight, with India leading in retail, institutional, DeFi, and decentralized services. Between June 2024 and June 2025, on-chain activity increased by 69% year-over-year.
Across India and the APAC region, crypto transaction volume has surged from $1.4 trillion to $2.36 trillion, drawing exchanges to the market despite stringent requirements. Separately, India aims to adopt the OECD’s CARF by April 2027, enabling cross-border reporting of crypto flows.
A top finance ministry official stated that India plans to sign the Multilateral Competent Authority Agreement (MCAA) next year, thereby establishing the legal framework for the automatic exchange of tax information. The country already joined the MCAA in 2015 for financial accounts, and the new version will extend to digital assets.
The new system will track investors’ digital assets on foreign platforms and mandate reporting of trades on overseas CEXs. Tax experts warn that, once implemented, the regime will apply retrospectively, allowing officials to issue notices for prior undeclared gains.
