India's FIU tightens KYC and AML rules for crypto onboarding

India’s Financial Intelligence Unit (FIU), which sets anti-money-laundering and know-your-customer regulations, has issued new guidelines tightening onboarding rules for users of regulated crypto exchanges in the country. Under the measures, exchanges must verify users with live selfie pictures and geographic-location checks, the Times of India reported, with the selfies processed by software that tracks eye and head movements to prevent AI deepfakes.

Platforms will also be required to collect geolocation and IP addresses at account creation with a timestamp, verify user bank accounts via a small transaction, and obtain additional government-issued photo ID along with verified email and mobile numbers. The changes come amid broader regulatory concerns in India.

Officials with the Income Tax Department told parliamentary lawmakers that decentralized exchanges, anonymous wallets and crypto’s cross-border functionality make taxation difficult, and under India’s Income Tax Act gains from cryptocurrency sales are taxed at 30% with limited allowances for offsetting losses.

Key Topics

Crypto, Financial Intelligence Unit, Crypto Exchanges, Kyc, Aml, Income Tax Department