25 Offshore Cryptocurrency Exchanges Under Radar in India

India’s Financial Intelligence Unit (FIU-IND) dropped a bombshell on October 1, 2025, slapping show-cause notices on 25 offshore cryptocurrency exchanges for flouting the country’s anti-money laundering (AML) laws. Big names like Huione, Paxful, CEX.IO, LBank, BingX, CoinEx, Poloniex, BitMex, BTCC, and Remitano are in the crosshairs, alongside lesser-known platforms such as YouHodler, PrimeXBT, and CoinCola.

The government didn’t stop at warnings—it’s moving to block these platforms’ websites and apps in India under the Information Technology Act, 2000, branding their operations illegal.

India’s crypto journey has been a rollercoaster. Back in 2017, Bitcoin’s global surge sparked a frenzy here, but the Reserve Bank of India (RBI) slammed the brakes in 2018 with a banking ban that choked off crypto’s lifeline. The Supreme Court lifted that ban in 2020, but the regulatory haze persisted. By March 2023, the Prevention of Money Laundering Act (PMLA) brought crypto under AML rules, requiring all Virtual Digital Asset Service Providers (VDA SPs)—local or foreign—to register with FIU-IND, follow know-your-customer (KYC) norms, and report suspicious transactions.

Over 50 exchanges, including heavyweights like Binance and KuCoin, have complied, some after paying steep fines. But India’s crypto tax regime—a brutal 30% on gains, 1% TDS on trades, and no loss offsets—remains one of the world’s harshest.This latest crackdown targets platforms that ignored these rules, serving Indian users without registering.

The FIU-IND’s list, detailed in its press release, names 25 offenders accused of enabling money laundering, terrorist financing, and fraud by dodging transaction reporting and record-keeping. Blocking their access aims to shield users from scams, building on a 2023 crackdown that saw nine exchanges, including Binance, delisted from app stores.

Supporters call it a victory for financial integrity. In a country where cyber frauds bleed billions yearly, regulating crypto stops it from becoming a black-money pipeline. One X user summed it up: “This is a step toward safer digital finance in India’s booming crypto market.”The benefits are hard to dismiss.

First, stricter AML rules curb illicit flows. India’s crypto market, despite heavy regulations, clocked over $4 billion in transactions last year, but unregistered platforms have fueled scams like pump-and-dumps and phishing. Forcing compliance ensures suspicious trades get flagged, aligning with global standards like those of the Financial Action Task Force (FATF). Second, it protects everyday investors. Many Indians, drawn to offshore exchanges for low fees and anonymity, risk losing funds to hacks or freezes with no legal recourse. The government’s blunt warning—“crypto carries high risks with no regulatory safety net”—hits home. Third, it could pave the way for a legit crypto ecosystem. Compliant exchanges like WazirX and CoinDCX are thriving, and approved offshore players show that registration isn’t a dealbreaker—it’s a gateway. Countries like Kazakhstan, with state-backed crypto funds, and Japan, tying NFTs to real assets, show what’s possible with clear rules.

But here’s where I get uneasy: this feels like swinging a sledgehammer at a problem that needs a scalpel. Crypto enthusiasts, and there are millions in India, see it as government overreach.

India leads globally in crypto adoption, with 35 million users despite the crackdowns. Yet, sky-high taxes and bans are driving traders to VPNs and decentralized wallets, potentially fueling the very black market the government wants to squash. One X post captured the fear: “Indian traders worry overseas wallets could be next,” hinting at scrutiny under global tax rules like the OECD’s. The 2018 ban slashed trading volumes by 90%, and history could repeat if users feel cornered.

The downsides are glaring. Innovation is taking a hit—startups are fleeing to crypto-friendly hubs like Singapore or Dubai because India’s rules are too vague and punitive. Banned exchanges might just geo-block Indian users, shrinking options and liquidity. Plus, the government’s all-stick, no-carrot approach ignores education. Many users break rules out of ignorance, not intent. X users are vocal about this: “It’s not about safety—it’s about keeping money traceable and taxable.” And while 50 exchanges have registered, the process is a bureaucratic nightmare, locking out smaller players.

Compare this to the world. The EU’s MiCA framework balances regulation with innovation, licensing exchanges while fostering growth. The US, despite SEC battles, has a thriving crypto scene thanks to clear (if debated) guidelines. Even China’s total ban hasn’t stopped its citizens from using offshore platforms—India could face the same if it overplays its hand. Kazakhstan’s crypto fund launch shows proactive engagement, while India’s audits and notices feel like playing catch-up.

So, what’s the fix? The government needs to balance enforcement with incentives. Simplify registration—cut the red tape and offer tax breaks, like lower TDS for compliant exchanges. Launch education campaigns, like the upcoming ‘Your Money, Your Right’ drive for unclaimed assets, to teach users about compliance. Create regulatory sandboxes to test crypto products, mirroring RBI’s CBDC pilots. Mandate cybersecurity audits for all VDA SPs to build trust, especially after recent hacks.

And most importantly, talk to the industry—groups like the Bharat Web3 Association can help craft policies that work for everyone.This crackdown on 25 exchanges is a defining moment. It signals that India won’t tolerate a Wild West in crypto, and that’s a good thing—unregulated platforms are a recipe for chaos.

But without reforms, it could alienate the innovators driving India’s digital economy, projected to hit $5 trillion soon. With 35 million crypto users and counting, India has a chance to lead the digital asset revolution, not just police it. Let’s hope this move sparks a conversation, not a standoff, because smart regulation could turn India’s crypto passion into a global powerhouse.

Naorem Mohen

Naorem Mohen is the Editor of Signpost News. Explore his views and opinion on X: @laimacha.