India’s Financial Intelligence Unit (FIU-IND) has reportedly issued a directive requiring all operational crypto exchanges to update the Know Your Customer (KYC) data of Indian users by June 30, 2025. This move is specifically aimed at refreshing user details that are older than 18 months, as part of a wider crackdown on non-compliance with crypto tax regulations and to ensure the accuracy of user identification.
According to reports from The Economic Times, several exchanges and users have been found to be sidestepping India’s one percent TDS rule on crypto trades. In response, the FIU is stepping up enforcement, aiming to close loopholes in the Virtual Digital Assets (VDA) ecosystem. Crypto platforms like Mudrex and Pi42 have confirmed receiving instructions about the upcoming compliance deadline.
The Bharat Web3 Association (BWA), a New Delhi-based independent body focused on digital assets, described the FIU’s directive as a significant regulatory step. In a recent LinkedIn post, the BWA stated that the KYC update order—issued under the Prevention of Money Laundering Act (PMLA)—is key to fostering a transparent and secure crypto environment in India. The association voiced strong support for the measure, calling it essential for long-term market credibility.
Mudrex CEO Edul Patel emphasized that exchanges bear the responsibility of not just verifying users, but also educating them about tax obligations, including TDS deductions. He stressed that platforms must empower users with the knowledge required to remain legally compliant in an evolving regulatory landscape.
Binance, one of the world’s leading crypto exchanges, has already begun notifying its Indian user base about the re-verification process. Emails sent to users instruct them to provide their Permanent Account Number (PAN), a mandatory 10-digit tax identification code issued by India’s Income Tax Department.
Digital South founder Sudhakar Lakshmanaraja noted that India's tightening grip on crypto oversight aligns it more closely with global regulatory trends. He praised the FIU’s move as a forward-thinking initiative that signals India's readiness to responsibly integrate digital assets into its financial system.
Despite these steps, India has yet to enact a comprehensive legislative framework for the crypto sector. However, earlier this year, Finance Secretary Sanjay Malhotra confirmed that the government is working on a discussion paper that would outline a clearer regulatory roadmap for digital currencies in India.
Until then, directives like the FIU’s KYC compliance deadline represent incremental efforts by Indian authorities to establish order, build trust, and bring accountability to the fast-evolving world of cryptocurrency.