- Bybit has successfully registered with the Financial Intelligence Unit India (FIU-IND).
- The Indian government mandates that all Virtual Digital Asset Service Providers (VDASPs) register with FIU-IND and adhere to strict AML and CFT measures.
- Bybit settled a $1 million penalty before securing approval.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has registered with the Financial Intelligence Unit India (FIU-IND). This development comes after the exchange settled a monetary penalty of approximately $1 million (INR9.27 crore) for operating without prior authorization.
Bybit’s Regulatory Journey in India
Bybit’s registration with FIU-IND shows its intent to adhering to India’s regulatory landscape. The exchange has been working closely with FIU-IND to ensure full compliance with the Prevention of Money Laundering Act (PMLA) and associated regulations.
Bybit acknowledges the importance of robust Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures and is committed to upholding the highest standards in these areas.
In a statement, Bybit mentioned, “We have been working diligently with the FIU-IND to address their concerns and ensure full adherence to the Prevention of Money Laundering Act and associated regulations.”
The exchange also highlighted its proactive steps in resolving prior regulatory matters, further demonstrating its dedication to transparency in the Indian market.
India’s Cryptocurrency Regulatory Environment
India’s stance on cryptocurrencies has been characterized by caution and deliberation. In March 2023, the government mandated that all crypto exchanges, including offshore platforms, register with FIU-IND and comply with the PMLA. This move aimed to enhance oversight and mitigate risks associated with money laundering and terrorist financing.
In December 2023, The Financial Intelligence Unit India (FIU IND) issued compliance notices to nine major platforms, including Binance and Kraken, for allegedly operating illegally in the country.
Despite the regulatory challenges, the Indian crypto market has witnessed substantial growth. Investors have poured significant capital into digital assets, even as the government imposed a 30% tax on crypto gains and a 1% TDS on transactions. These measures, introduced in July 2022, were designed to bring cryptocurrency transactions under the tax net and monitor the flow of digital assets.
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman proposed an amendment to the Income Tax Act, mandating that designated reporting entities disclose transaction details related to virtual digital assets (VDAs). This move aims to strengthen the reporting framework and ensure greater transparency in crypto transactions.
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Bybit’s Initiatives in India
Beyond regulatory compliance, Bybit is actively engaging with the Indian crypto community. The exchange has become a Silver Associate Member of the Bharat Web3 Association (BWA), aiming to promote Web3 adoption and foster innovation in the Indian crypto ecosystem.
Bybit’s not-for-profit initiative, Blockchain for Good Alliance (BGA), has partnered with blockchain societies of top universities, including the Indian Institutes of Technology (IIT) Delhi and IIT Kharagpur. Through these collaborations, Bybit plans to conduct a series of hackathons, workshops, and other events to drive crypto and blockchain education and awareness in India.
The Broader Implications of Bybit’s registration with FIU-IND
Bybit’s registration with FIU-IND and its proactive steps in the Indian market reflect a broader trend of global crypto exchanges seeking to align with local regulations. This approach ensures compliance and builds trust among users and regulators.
India’s cryptocurrency landscape is at a crossroads. The government’s stringent tax regime and regulatory measures indicate a cautious approach, yet the significant investment and interest in digital assets suggest a burgeoning market. The recent move to include crypto assets in the definition of undisclosed income further shows the government’s intent to tighten oversight.
Economic Affairs Secretary Ajay Seth highlighted the need for a balanced approach, stating that India’s stance cannot be unilateral given the borderless nature of cryptocurrencies. This perspective suggests that India is open to reevaluating its crypto policies in light of global developments.
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