Taking us all by surprise, KuCoin has been named the first-ever global cryptocurrency platform to meet the strict compliance standards set by the Financial Intelligence Unit—India (FIU-IND). This regulatory body, a very powerful arm of the Department of Revenue within the Indian Government, is tasked with gathering financial intelligence related to offenses under the Prevention of Money Laundering Act (PMLA) of 2002.
Why the FIU Matters
Operating since November 2004, the FIU-IND is at the top of India’s efforts to combat financial crimes, reporting directly to the Economic Intelligence Council led by the Finance Minister. The primary functions of the FIU-IND includes a wide range of activities directed at preventing money laundering and associated illegal activities.
These functions include collecting various reports from entities, such as Cash Transaction Reports (CTRs), Cross Border Wire Transfer Reports (CBWTRs), and Suspicious Transaction Reports (STRs). Furthermore, the FIU-IND analyzes this data to identify transaction patterns that might indicate suspicious activities, shares all important information with both national and international law enforcement agencies, and serves as a central repository for this data to support ongoing investigations and research into money laundering trends.
KuCoin becoming FIU-compliant represents a step towards improved regulatory clarity and security for investors, setting a precedent for other exchanges operating within a country that isn’t crypto’s biggest fan.
Regulatory Challenges and Compliance
December 2023 saw the FIU issue notices to nine cryptocurrency exchanges for failing to adhere to the PMLA’s requirements, which forced KuCoin to get temporary delisted from Apple’s App Store. To be considered compliant, the FIU said that crypto exchanges must register as “Reporting Entities” with the FIU, a step that many offshore exchanges like KuCoin have neglected, thus positioning themselves outside India’s regulatory framework.
The importance of this compliance was further highlighted as Indian cryptocurrency users were advised to move their assets to local FIU-registered exchanges if they want to remain within a secure and regulated environment. This comes in the wake of the Indian government’s aggressive tax measures on cryptocurrency transactions, including a 30% tax on all crypto income and a 1% tax deducted at source (TDS) on transactions exceeding 10,000 rupees. Such policies have affected trading volumes on local exchanges, with many users desperately looking alternatives in global platforms that offer more lenient KYC procedures.
Despite the Reserve Bank of India’s (RBI) previous attempts to ban cryptocurrencies—a decision that was later reversed by the Supreme Court—the central bank continues to express its reservations about digital currencies, often comparing them to Ponzi schemes.
Amid these regulatory challenges, KuCoin’s recognition by Forbes Advisor as one of “The Best Crypto Apps & Exchanges of March 2024” showcases its excellence and commitment to providing a safe, secure, and compliant trading platform. This accolade follows KuCoin’s previous acknowledgment by Forbes as a leading crypto exchange in 2023.
