India has taken a new step to tighten its oversight of the cryptocurrency market, adopting a tough stance against privacy-focused crypto assets.
The Financial Intelligence Unit (FIU) of the Indian Ministry of Finance has instructed cryptocurrency exchanges and platforms in the country to delist Anonymous-Enhancing Coins (ACE).
According to the FIU’s statement, these types of anonymously focused tokens have been classified as unacceptable assets under the “risk mitigation framework.” Therefore, crypto platforms are requested not to allow deposits and withdrawals for these tokens. The decision is considered a significant step in combating crimes such as money laundering and terrorist financing.
Authorities also drew attention to the use of mixing services such as “tumblers” and “mixers.” They emphasized that these tools make it difficult to trace funds originating from sanctioned or blacklisted addresses, potentially allowing these funds to infiltrate the financial system. The FIU specifically pointed out that transfers made through such tools carry significant risks.
Under the new regulations, crypto platforms will be required to collect more data on transactions associated with non-custodial wallets. Additionally, there are plans to introduce specific limit limits on transfers to such wallets. The aim is to increase traceability and prevent illicit fund movements.
According to experts, India’s move is part of a growing global crackdown on privacy coins. Similar restrictions have been implemented previously by European and some Asian countries. India’s decision is expected to lead to significant changes in the country’s crypto ecosystem, with investors and platforms anticipated to quickly adapt to the new rules.
*This is not investment advice.