Action against Illegal Offshore Cryptocurrency Platforms

In response to a Lok Sabha question on action against illegal offshore cryptocurrency platforms, the Ministry of Finance clarified that crypto and virtual assets are currently not regulated in India, and thus no platform can be classified as legal or illegal at this stage. However, from an anti-money laundering and counter-terrorism financing (AML/CFT) standpoint, the Financial Intelligence Unit (FIU-IND) requires Virtual Asset Service Providers (VASPs)—including those offshore serving Indian users—to register under the Prevention of Money Laundering Act (PMLA). FIU-IND maintains a dynamic list of non-registered platforms. While no specific list of platforms, countries of origin, or valuations over the past five years was provided, the government has introduced certain oversight measures. The Finance Act, 2022, included Section 194S in the Income-tax Act, which mandates a 1% TDS on all transfers of Virtual Digital Assets (VDAs), including those through offshore platforms, if the income is taxable in India. Additionally, the Reserve Bank of India (RBI) has issued multiple advisories to caution users, traders, and holders of crypto assets about potential risks such as financial, legal, and operational vulnerabilities. These advisories have been general in nature and not directed at specific platforms. No formal awareness campaigns have been launched by the government specifically targeting the use of offshore or unregulated crypto platforms.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS

LOK SABHA
UNSTARRED QUESTION NO.15
TO BE ANSWERED ON MONDAY, JULY 21, 2025/ ASHADHA 30, 1947 (SAKA)

Action against Illegal Offshore Cryptocurrency Platforms

15. Shri Putta Mahesh Kumar:
Shri Krishna Prasad Tenneti:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has conducted any study/survey regarding the illegal offshore cryptocurrency platforms presently functioning in the country;

(b) if so, the list of such platforms, the country of origin and total valuation during the last five years;

(c) the details regarding the action taken by the Government to curb such illegal platforms; and

(d) whether the Government has undertaken any activities/campaign to raise awareness regarding the dangers of using such illegal platforms amongst the common man of the country, if so, the details thereof and if not, the reasons therefor?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)

(a) to (d): At present, crypto / virtual assets are not regulated in India. Consequently, the question of the legality or illegality of specific crypto platforms does not arise as on date. However, to ensure oversight from an anti-money laundering and countering the financing of terrorism (AML/CFT) perspective, the Financial Intelligence Unit (FIU-IND) registers Virtual Asset Service Providers (VASPs) under the Prevention of Money Laundering Act (PMLA). This registration requirement applies equally to domestic and offshore platforms that cater to users based in India. FIU-IND therefore maintains a dynamic list of virtual asset service providers who are not registered with them. Separately, the Finance Act, 2022, introduced Section 194S in the Income-tax Act, 1961, mandating a 1% Tax Deducted at Source (TDS) on the transfer of Virtual Digital Assets (VDAs). This applies to all transactions, including those involving offshore entities, if the income is chargeable to tax in India. Further the Reserve Bank of India (RBI) has issued advisories warning users, holders, and traders of virtual currencies or crypto assets about the potential risks, including economic, financial, operational, legal, and security concerns. These advisories have been sector-wide and have not commented on individual platforms.