According to official releases and news reports, India’s Financial Intelligence Unit (FIU) rolled out tougher Know-Your-Customer (KYC) and anti-money-laundering checks that crypto platforms must use when bringing new users on board.
Based on reports, the rules add live biometric checks, location data capture, and bank-account verification steps designed to cut down on anonymous accounts and suspicious flows.
Live Selfie And Geo-Tagging Required
Reports have disclosed that new sign-up flows must include a live selfie verified by liveness detection — such as eye blink or head movement checks — so a static or doctored photo can’t be used.
Platforms must also record latitude and longitude, the device IP address and a timestamp at the moment a user registers. Those pieces of data will be kept as part of the KYC record, according to coverage by major outlets.
A Penny-Drop To Confirm Bank Ownership
Exchanges are required to carry out a so-called penny-drop — a nominal ₹1 transfer — to confirm the customer actually controls the linked bank account. Users must supply PAN plus a secondary government ID such as Aadhaar, passport or voter ID, and verify phone and email addresses with OTPs. These steps are intended to tighten the link between identity and on-chain activity.
Enhanced Ongoing Checks And Reporting Duties
Exchanges must refresh KYC every year for ordinary users and every six months for clients flagged as higher risk. Reporting duties have been stepped up: platforms will register as reporting entities with the FIU under the Prevention Of Money Laundering Act (PMLA) and file suspicious transaction reports when triggers are hit. Based on industry commentary, that will raise compliance costs and slow down onboarding for new retail customers.
The iconic Taj Mahal of India. Image credit: Kriangkrai Thitimakorn via Getty Images.
Market And User Impact
Industry participants told reporters that the new steps are likely to increase the time it takes a user to open an account and will push up operational costs for platforms that must integrate biometric and geolocation systems. While regulators say the measures aim to block illicit finance, some retail investors may find the process harder to complete, which could affect volumes in the near term.
According to sources, the FIU expects exchanges to implement these checks promptly and to keep records for audit. Failure to comply could invite action under PMLA rules. Observers say the move aligns India with stricter global KYC norms and signals that regulators plan active oversight as crypto use grows.
Featured image from Unsplash, chart from TradingView
