Indian authorities move to block crypto exchange platforms including Huione, CEX.IO and BingX amid growing concerns over money laundering risks.
In a surprising move, India has launched a major crackdown on offshore cryptocurrency exchanges, alleging they have ignored domestic rules. This move marks one of the most assertive regulatory actions India has taken against the digital asset sector to date.
Authorities have identified 25 crypto exchanges, including well-known platforms such as Huione, CEX.IO and BingX, and claims that they have failed to comply with financial requirements. Regulators worldwide are becoming increasingly concerned about the risks posed by lightly-governed crypto firms that serve and hold the funds of millions of investors, whilst operating outside local jurisdictions.
Applying India’s financial laws to crypto companies
For the past two years, India has attempted to bring the cryptocurrency market under the scope of its financial regulation. It obliges exchanges handling digital assets to register with the Financial Intelligence Unit (FIU-IND) and operate under India’s Prevention of Money Laundering Act. It also requires companies to continuously report suspicious transactions and maintain robust systems to counter illicit finance.
Officials maintain that many offshore operators are ignoring these obligations and continuing to serve Indian clients without proper registration or transparency. The FIU has now taken action to block access to the offending platforms, cutting them off from domestic users. A spokesperson said: “Our priority is to protect Indian investors and ensure the integrity of the financial system. Platforms that ignore our regulations will not be allowed to operate with impunity.”
The impact on Investors
The crackdown will most likely cause disruption for thousands of Indian users who have assets stored with offshore crypto exchanges. Investors could find their funds temporarily frozen should crypto platforms restrict withdrawals during the compliance drive.
Some exchanges may engage with Indian regulators and apply for registration to regain access to the highly lucrative Indian market. Exchanges could withdraw entirely and users will be forced to migrate to domestic platforms such as CoinDCX and WazirX, which are already regulated by the FUI.
A senior executive of one Indian exchange stated: “Investors need reassurance that their assets are safe. We support regulation, but it must be communicated properly to avoid unnecessary anxiety.”
A shift towards stricter regulation of digital asset firms
India’s actions mirror an international shift towards stricter regulation of digital asset firms. The United States, European Union and several Asian economies have already introduced or tightened regulation, requiring crypto platforms to implement anti-money laundering checks and register with financial watchdogs.
Regulators have recently raised concerns about stablecoins and cross-border transfers, which they believe could encourage illicit flows of capital. Offshore exchanges are generally seen as high-risk, especially when their ownership structures lack transparency.
India hopes that by cracking down, it can protect investors and also align itself with global financial standards.
What happens next?
What happens next will largely depend on how targeted crypto exchanges respond. If major players such as CEX.IO or BingX choose to register and cooperate, then the government may view this as a success and set a precedent for other firms. Whatever happens, India’s domestic crypto exchanges may see a significant boost in market share.
The key message is to remain cautious.
