The Indian Financial Intelligence Unit (FIU) has issued new guidelines, tightening the process of onboarding users on crypto platforms to enhance anti-money laundering (AML) and identity verification (KYC).
Under the new regulations, regulated crypto exchanges are required to ask users to take a live selfie, combined with eye and head movement tracking software to prevent AI deepfakes. Additionally, exchanges must collect geolocation data, IP addresses, and timestamps at the time of account creation.
Exchanges are also mandated to verify bank accounts by sending a small amount of money, requiring users to provide government-issued photo ID documents, and verify email and phone numbers.
This move reflects India’s increasingly strict regulatory stance on crypto and digital assets. With a population of over 1.4 billion, the participation of Indian citizens on-chain is expected to create a new wave of investment for the global crypto market.
In related developments, India’s Income Tax Department (ITD) considers crypto a tool for tax evasion, due to the decentralized exchanges, anonymous wallets, and cross-border nature that complicate regulation. Currently, profits from crypto trading in India are taxed at a rate of 30%, with only the principal costs deductible and no offsetting of losses between transactions.
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