What You Need to Know About India’s New Crypto User Verification Rules

India’s Financial Intelligence Unit (FIU) has introduced enhanced compliance requirements for cryptocurrency platforms, focusing on robust identity verification to combat deepfakes and illicit activities. These new rules mandate live selfie authentication with dynamic movement verification, along with geolocation data collection during user onboarding. Users must now provide a secondary form of identification alongside their Permanent Account Number (PAN), and email/mobile verification is conducted via OTP and a penny-drop method.

High-risk users, including those linked to tax havens or politically exposed persons, will face more frequent KYC updates. The FIU also discourages Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs) due to money laundering and terror financing concerns, and is cracking down on anonymity-enhancing tools.

However, India’s 30% tax on crypto profits and 1% TDS are driving users to offshore exchanges, with 91.5% of Indian crypto trading now occurring outside the country, resulting in significant revenue loss for the government. The industry faces a critical juncture balancing oversight with domestic engagement.

(Source：BeInCrypto)