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The Director, Financial Intelligence Unit-India issued non-compliance notices to 15 Virtual Digital Asset Service Providers under Section 13 of the Prevention of Money Laundering Act, 2002.
The same order directs the takedown of their applications and URLs, using the Director's role as nodal officer under Section 79(3)(b) of the Information Technology Act, 2000 read with rule 3(1)(d) of the IT (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2025.
VDA Service Providers were brought inside India's AML/CFT framework under the PMLA in March 2023 and must register with FIU-IND as Reporting Entities.
The obligations are activity-based: an offshore platform serving Indian users is covered even without any physical presence in India.
The release repeats the standing public warning that crypto products and NFTs are unregulated, highly risky, and carry no regulatory recourse for losses.
Passed on 17 January 2003 and brought into force on 1 July 2005. Section 12 casts reporting, record-keeping and client-identification duties on 'Reporting Entities'; Section 13 empowers the Director, FIU-IND to make inquiries into an entity's compliance with those duties and to act on default — the provision used here.
A statutory category covering banking companies, financial institutions, intermediaries and notified businesses that must file Suspicious Transaction Reports, Cash Transaction Reports and Cross-Border Wire Transfer Reports with FIU-IND. Since March 2023 VDA Service Providers are in this category, which is why registration is mandatory rather than voluntary.
Removes an intermediary's safe-harbour protection where it fails to act on a notification by an appropriate government agency; read with rule 3(1)(d) of the IT (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2025, it lets the designated nodal officer order access to unlawful applications and URLs to be blocked.
Inserted by the Finance Act, 2022 to define a Virtual Digital Asset. Gains on transfer are taxed at a flat 30% under Section 115BBH with no deduction except cost of acquisition and no set-off of losses, and Section 194S imposes 1% TDS on consideration above the prescribed threshold. Note that taxing VDAs is not the same as legalising or regulating them.
Central national agency that receives, processes, analyses and disseminates information on suspect financial transactions, and shares it with law-enforcement agencies, regulators and foreign FIUs. It registers Reporting Entities and enforces their PMLA obligations
Investigates and prosecutes money-laundering offences; enforces the Foreign Exchange Management Act, 1999, the PMLA, 2002 and the Fugitive Economic Offenders Act, 2018. FIU-IND analyses and flags; the ED investigates and attaches — the two are distinct
Global standard-setter for anti-money laundering and counter-terrorist financing; its Recommendations are the source of the VDA obligations India applied in March 2023, and it conducts mutual evaluations of member jurisdictions
A technology-neutral statutory category: any code, number or token generated cryptographically or otherwise that carries a digital representation of value, functions as a store of value or unit of account, plus non-fungible tokens and anything else the Centre notifies. It excludes Indian and foreign currency.
Simple Analogy: A legal net cast by function, not by the name a coin gives itself.
GS Paper 3 > Indian Economy > Money Laundering and its Prevention
General Awareness > Financial Regulators and AML/KYC
With reference to the Government of India, consider the following information: I. Directorate of Enforcement : Enforcement of the Fugitive Economic Offenders Act, 2018 : Internal Security Division-I, Ministry of Home Affairs II. Directorate of Revenue Intelligence : Enforces the Provisions of the Customs Act, 1962 : Department of Revenue, Ministry of Finance III. Directorate General of Systems and Data Management : Carrying out big data analytics... : Department of Revenue, Ministry of Finance In how many of the above rows is the information correctly matched?
Answer: Only two
Financial Intelligence Unit-India — set up 18 November 2004 in the Department of Revenue, Ministry of Finance; the national agency for analysing suspect financial transactions, reporting to the Economic Intelligence Council.
A PMLA category of persons and businesses obliged to register with FIU-IND and file prescribed transaction reports; extended to VDA Service Providers in March 2023.
Anti-Money Laundering and Counter Financing of Terrorism — the FATF-derived framework the PMLA implements in India.