India’s crypto regulatory environment took a sharp turn this week. Three major enforcement actions landed in quick succession: the Financial Intelligence Unit (FIU-IND) imposed a transparency order on OTC trades, the Enforcement Directorate (ED) raided five platforms in Bengaluru, and Binance rolled out stricter user information requirements. These moves follow 44,000 tax notices and earlier raids on crypto firms over rule avoidance.
FIU's OTC Crackdown: Full Beneficial Ownership Disclosure
FIU-IND has told at least three major crypto exchanges to hand over records of every over-the-counter (OTC) trade above $10,000 (₹9.44 lakh). Exchanges must also trace the real individuals behind private companies and intermediaries that executed these trades. The order covers all OTC transactions from January 2026 onward, closing a gap that allowed large, hard-to-track cryptocurrency movements to slip past regulators. Large players who used OTC desks to hide assets may now face bigger income tax bills.
ED Raids in Bengaluru: Five Crypto Firms Under FEMA Scrutiny
Days before the FIU order, the Enforcement Directorate raided five crypto platforms in Bengaluru, accusing them of unauthorized cross-border cryptocurrency transfers violating the Foreign Exchange Management Act (FEMA). The raids signal regulators are done waiting.
Binance's New Rule: Shared Sender and Beneficiary Details
Around the same time, Binance introduced a rule forcing Indian users to share full sender and beneficiary details for every transaction. Three major actions in one week — it's a pattern, not a coincidence.
Tax Framework Unchanged but Oversight Tightens
India’s 30% tax on crypto gains and 1% TDS on transfers remain unchanged. Regular traders on public exchanges will see little difference. But the new rules target whales moving large sums through private deals, which until now stayed mostly invisible. PMLA compliance already required exchanges to register as VDASPs and monitor suspicious activity; the new order sharpens that existing AML framework directly at the OTC blind spot.
Exchanges will likely tighten their OTC desks with upfront identity checks. Some traders may slow down or shift to already compliant platforms. India is not banning crypto — it's building a paper trail, one rule at a time. The days of quiet, untraceable digital wealth in the country are closing fast.