India’s Crypto Regulatory Ambiguity Continues as FIU Registration Becomes Mandatory

India's stance on cryptocurrency remains nebulous, with the Ministry of Finance clarifying that virtual assets are neither regulated nor explicitly banned. Minister of State for Finance Pankaj Chaudhary emphasized that crypto platforms cannot be deemed legal or illegal under current law. Yet, the Financial Intelligence Unit (FIU-IND) now mandates all Virtual Asset Service Providers—domestic and international—to register under anti-money laundering provisions.

The move creates a paradoxical landscape: exchanges operate in a regulatory gray zone but face compliance requirements. Non-registered platforms risk public blacklisting, signaling heightened scrutiny despite the absence of formal crypto legislation. Global exchanges serving Indian users must now navigate this unresolved framework, where operational survival hinges on FIU registration rather than clear legal status.