- Why in news
- On 9 September 2026, FIU-IND issued non-compliance notices under Section 13 of the PMLA to 15 virtual digital asset service providers. It also issued takedown notices for their apps and URLs.
- What it is
- FIU-India is the central national agency that receives, processes, analyses and shares information on suspicious financial transactions. It works under the Ministry of Finance and coordinates with enforcement and intelligence agencies. Under the PMLA it supervises reporting entities, which now include virtual digital asset service providers.
- Action taken
- The Director, FIU-IND issued notices to 15 VDA service providers under Section 13 of the PMLA for non-compliance.
- When VDA SPs came under PMLA
- VDA SPs were brought under the AML/CFT framework of the PMLA in March 2023.
- Activity-based, not location-based
- Obligations apply to offshore and onshore VDA SPs serving India. They do not depend on physical presence in India.
- Takedown power
- The Director, FIU-IND acts as nodal officer under Section 79(3)(b) of the IT Act, 2000 to seek takedown of illegal apps and URLs.
- Obligations
- Covered VDA SPs must register with FIU-IND as reporting entities, report transactions and keep records.
- FIU-IND parent body
- FIU-IND was set up in 2004 and reports to the Economic Intelligence Council headed by the Finance Minister.
Don’t confuse with Registration vs regulation: Registration with FIU-IND is only for AML/CFT compliance. It does not make crypto assets legally regulated or protected as a financial product.
Don’t confuse with FIU-IND vs Enforcement Directorate: FIU-IND analyses and disseminates financial intelligence and monitors reporting entities. The ED investigates and prosecutes money laundering offences.
Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.
Why it matters
- Brings offshore crypto platforms serving Indian users under India's AML/CFT rules.
- Helps curb use of crypto for laundering and terror financing.
Problems
- Enforcing rules against foreign entities with no presence in India is difficult.
- Blocked sites can reappear under new URLs, and crypto remains outside a full regulatory framework.
Way forward
- Strengthen international cooperation with foreign regulators and FIUs.
- Build a comprehensive crypto regulatory framework alongside the AML regime.
Put in your answer
March 2023 PMLA extension: Cite the March 2023 extension of PMLA to VDA SPs as the base for crypto AML oversight.
Public risk warning: The government warns that crypto products and NFTs are unregulated and may leave no regulatory recourse for losses.
- 2026Mains GS3 · Q20Money laundering and terror funding; FATF role and member state compliance
- 2013Mains GS3 · Q21Significance of money laundering for India's sovereignty and steps to control it
- 2021Mains GS3 · Q9How emerging technologies and globalisation aid money laundering, and countermeasures nationally and internationally
- 2022Prelims Q69Which statements about NFTs as blockchain-based unique cryptographic tokens are correct?
- 2026Prelims Q91Which statements about tokenising real-world assets using blockchain are correct?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting topic on crypto and AML law, but the release is a list of notices to firms. Few testable facts; laws and bodies are 7% of news-linked Prelims questions.
Worth revising until Prelims 2028: most news questions come within two years of the event.