India Enforces 6-Month Crypto KYC Rule After $279M Exchange Hacks
India has really ramped up know-your-customer requirements for people using cryptocurrencies under new rules issued by the Financial...
Quick overview
- India has implemented stricter know-your-customer (KYC) requirements for cryptocurrency users to enhance user identification and reduce risks like fraud and money laundering.
- Crypto exchanges must now verify users through live selfies, proper identification, and regular checks on their contact information and bank accounts.
- The new regulations are a response to significant security breaches in the Indian crypto market, aiming to prevent the use of tools that facilitate money laundering.
- Despite having tough crypto laws, the Reserve Bank of India remains concerned about the risks associated with cryptocurrency for everyday users.
India has really ramped up know-your-customer requirements for people using cryptocurrencies under new rules issued by the Financial Intelligence Unit. According to local media, the new guidelines have required regulated crypto platforms to dig a bit deeper into onboarding new users and to check in with them more often.
The whole aim of these new measures is to plug gaps in how users are identified and to reduce the risk of all sorts of nasty stuff, like fraud, money laundering, and people using crypto to get their hands on other people’s money. The folks in charge are keen to stop people using deepfakes to get around the usual ID checks.
What the New KYC Rules Mean
The new rules require crypto exchanges to go that bit further to ensure their users are who they claim to be. This means making onboarding more like what you’d find in banking – a lot more security.
BREAKING: 🇮🇳 FIU-India now requires Crypto platforms to appoint an AML officer, get CERT-In security audits, and share sender & receiver data, even for self-custody wallets.
Source: Moneycontrol pic.twitter.com/ZUgXeIxaQ7
— Sapna Singh (@earnwithsapna) January 11, 2026
Some of the things that exchanges have to do to check out new users now include:
- That old chestnut – verify users through a live selfie to make sure they aren’t using a fake image
- Make sure the user has sent over a proper ID, like an ID card or a passport
- Check that the user’s email and mobile number are legit
- Do a tiny little test transfer to a bank account to make sure everything is working as it should
- Collect a load of other useful data like IP address, geolocation, and all that other stuff
Even if users aren’t considered high risk, they still have to do all this again every year. The regulators are big on the idea of having users regularly verify their details to spot suspicious activity.
The Impact of Hacks, Privacy Coins, and All That
The new rules are a direct result of two significant security breaches that shook up the Indian crypto scene. Back in 2024, WazirX lost a chunk of cash, causing severe disruption. And then all last year, CoinDCX got hacked and lost some dosh.
The stricter rules also mention that the FIU isn’t keen on some of the more shady tools that some crypto users like to use, like mixers and tumblers – the FIU reckon they make it too easy for people to get around anti-money laundering laws.
And to make things clear, the FIU has also made it clear that they aren’t a fan of things like Initial Coin Offerings or Initial Token Offerings – they think they increase the risks of money laundering and that sort of thing.
India already has one of the toughest crypto laws in the world, and theyre not going to change now. They’re going to keep taxing people on crypto gains, and they’ll keep a close eye on exchanges to make sure they’re not getting too dodgy.
The Reserve Bank of India is still worried about all the fuss around crypto – they reckon it’s too risky for everyday people to be messing about with it. This is all part of the ongoing battle in India to ensure people can use crypto without it falling into the dodgy stuff.
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