India FIU Cracks Down on Privacy Coins Over AML Risks

Source: Coinomedia Original Title: India FIU Cracks Down on Privacy Coins Over AML Risks Original Link: https://coinomedia.com/india-fiu-cracks-down-on-privacy-coins-over-aml-risks/ In a major regulatory move, India’s Financial Intelligence Unit (FIU) has instructed crypto exchanges operating in the country to halt support for privacy coins, citing growing concerns over money laundering and illicit activity.

Privacy-focused cryptocurrencies such as Monero (XMR), Zcash (ZEC), and Dash are known for offering high levels of user anonymity, which has made them attractive for certain users—but also flagged them as high-risk assets by regulators. According to the FIU, these coins obstruct transparency, making it difficult to track transactions for anti-money laundering (AML) purposes.

Crypto Platforms Ordered to Delist Privacy Tokens

The FIU’s directive affects both local and international exchanges operating in India. The order compels these platforms to delist privacy coins immediately, in line with the country’s broader push for compliance with AML and counter-terrorism financing (CTF) standards.

This crackdown follows a trend seen in other countries like Japan and South Korea, where privacy coins have also faced delisting due to similar concerns.

Exchanges in India will now be expected to:

• Disable deposits and withdrawals of privacy coins.
• Restrict trading pairs involving these tokens.
• Implement enhanced due diligence measures for tokens offering user anonymity.

A Sign of Stricter Crypto Oversight in India

India’s move to restrict privacy coins is the latest sign of tightening crypto regulation, particularly as the country strengthens its AML framework. It also comes after India required Virtual Digital Asset Service Providers (VDASPs) to register with the FIU and adhere to KYC norms.

While privacy advocates argue that these coins serve legitimate use cases like financial privacy, regulators continue to stress that unchecked anonymity poses systemic risks to financial security.

As the global crypto space evolves, the balance between privacy and compliance remains a hot topic—and India’s stance sends a clear message about where its priorities lie.