India has expanded the activities covered by its money-laundering rules, forcing crypto exchanges, custodians and other virtual-asset providers to undertake wider ownership checks, monitoring and reporting.
India has widened its anti-money-laundering net around cryptocurrency and other virtual digital assets, bringing more activity in the sector under the Prevention of Money-Laundering Act and increasing the compliance burden on exchanges, custodians and other service providers. The Ministry of Finance’s latest changes extend the scope of covered activity to include exchanges between virtual digital assets and fiat money, transfers of virtual digital assets, custody arrangements that allow control over them, and related financial services, according to material published by CAclubindia and specialist tax commentators. (fiuindia.gov.in)
The move builds on rules already in force. FIU-India says its updated anti-money-laundering and counter-terrorism financing guidelines for reporting entities providing virtual digital asset services took effect on 1 January 2026, and its website continues to list registration of virtual digital asset service providers as reporting entities. Juriscapitals reported that the Enforcement Directorate issued detailed compliance guidance for virtual asset service providers under the PMLA in March 2026, with requirements on know-your-customer checks, transaction monitoring and suspicious activity reporting. (fiuindia.gov.in)
The revised framework also tightens the rules on who counts as a beneficial owner. According to the summaries of the amendment, the threshold for companies has been cut to 10% from 25%, while the same 10% test now applies to trusts. That means reporting entities must dig deeper into ownership and control, collecting information on senior management, partners, trustees, beneficiaries and other relevant individuals depending on the customer’s legal form. For trusts, the filing burden now extends to documents relating to all trustees, while partnerships and companies face broader disclosure obligations. (fiuindia.gov.in)
The compliance net also reaches non-profit organisations more explicitly. The amended rules link such entities to the categories covered under the Income-Tax Act and require reporting entities to gather registration details from the NITI Aayog DARPAN portal. The aim appears to be to create a clearer paper trail for entities whose structures can make ownership and control harder to trace, especially where funds move across institutions or into digital-asset channels. (fiuindia.gov.in)
A further change is the introduction of a definition of politically exposed persons, covering people entrusted with prominent public functions by a foreign state, including heads of state or government, senior politicians, top civil servants, judges, military officers, executives of state-owned companies and senior party officials. In practice, that is likely to mean enhanced due diligence for banks, financial institutions and VDA platforms when dealing with such clients or counterparties. The amendment sits alongside a broader trend in India toward tighter digital-asset reporting, including income-tax rules that now require additional information on crypto-assets, central bank digital currencies and certain electronic money products. (fiuindia.gov.in)
For the market, the direction of travel is clear: virtual asset businesses are being pulled closer to the compliance standards long applied to mainstream finance. That matters not only for exchanges and wallet providers, but also for banks, intermediaries and professional firms that may sit anywhere along the onboarding, custody or payment chain. The practical effect is likely to be more documentation, more screening and more reporting, as India continues to align its digital-asset oversight with anti-money-laundering expectations used more broadly across the financial system. (fiuindia.gov.in)
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
