The Financial Intelligence Unit of India (FIU-IND) has reportedly instructed all crypto exchanges to verify the know your customer (KYC) data collected from users based in India, by the end of June. The KYC details that are older than 18 months will need to be refreshed by all operational exchanges. Mudrex and Pi42 confirmed the development to Gadgets 360 on Friday. The aim of this step is to maintain accurate details of crypto holders, while also identifying the flouters of the national crypto tax laws.
The FIU has observed that many crypto users as well as exchanges are neglecting the one percent TDS deduction law on crypto transactions, The Economic Times reported, citing anonymous sources. The agency now plans to tighten its oversight over crypto activities.
Bharat Web3 Association (BWA), which is an independent crypto advisory body based in New Delhi, said this directive underscores India’s push for regulatory accountability in the Virtual Digital Assets (VDA) space.
“The FIU-IND has directed all registered VDA exchanges to enhance KYC compliance by June 30, 2025, under the Prevention of Money Laundering Act (PMLA). This includes updating user data, re-verifying accounts older than 18 months,” the BWA posted on LinkedIn. “BWA supports this effort as a vital step toward fostering a transparent, secure, and regulation-aligned VDA ecosystem in India—one that builds long-term credibility.”
“All crypto exchanges operating in India are required to conduct periodic re-KYC and report TDS to the government.” Mudrex CEO Edul Patel told Gadgets 360. He also noted that crypto exchanges should take it upon themselves to ensure that their users are aware about tax obligations, helping them make informed decisions and stay on the right side of the law.
Earlier this week, Binance started informing its India users about the re-verification process through an email. The exchange has told its users to submit their PAN or (Permanent Account Number), which is a 10-digit identification number assigned to all taxpayers in India.
Sudhakar Lakshmanaraja, founder of Web3-focussed organisation, Digital South said that this step brings India in alignment with the global regulatory approach to crypto.
“Such proactive steps build greater confidence among stakeholders and reflect India’s intent to responsibly embrace the digital asset space,” Lakshmanaraja noted.
The government has yet to introduce comprehensive crypto legislation to govern the sector. Earlier in February this year, RBI Governor Sanjay Malhotra said that the government is working on its discussion paper that would clarify India’s stance on the crypto industry.
