India Strengthens KYC and AML Regulations for Cryptocurrency Users

The Financial Intelligence Unit of India Issues New Regulations

The Financial Intelligence Unit of India (FIU) has announced new guidelines that tighten the rules for registering users on cryptocurrency platforms. These new regulations require cryptocurrency exchanges to verify users through live photos and geographical location verification. According to The Times of India, live photos are verified with software that tracks eye and head movements to prevent the use of AI deep fakes in the KYC verification process.

Exchanges are also mandated to collect geolocation data and IP addresses at the time of account creation, along with a timestamp. To comply with anti-money laundering (AML) requirements, exchanges must verify users' bank accounts through a small transaction. Users are required to present a government-issued photo ID and verify their email and mobile numbers to create an account.

These new measures reflect the stance of Indian authorities towards cryptocurrencies, in a country with one of the largest marketplaces. With a population of over 1.4 billion, India could usher in a new wave of investment in cryptocurrencies.

India's tax regulations impose a 30% tax on profits from cryptocurrency sales, and traders cannot offset their gains by utilizing losses from previous transactions. This further complicates the tax regime for cryptocurrencies in the Asian nation.