Indian FIU Fined Bybit $1 Million for AML Non-Compliance

Bybit Faces Regulatory Action in India

Cryptocurrency exchange Bybit has been fined INR 927 million ($1.06 million) by the Financial Intelligence Unit of India (FIU-IND) for non-compliance with the country‘s anti-money laundering laws. The fine was issued under the Prevention of Money Laundering Act (PMLA) as part of India’s broader effort to tighten regulatory oversight on virtual digital asset service providers (VDA SPs).

The official statement released on January 31 classifies Bybit as a “reporting entity” under Section 2(1)(WA) of the PMLA. Despite its obligations, the exchange continued to offer services in India without securing mandatory registration with FIU-IND. This led authorities to take enforcement actions against the exchange.

India Blocks Bybit‘s Website via MEITY Directive

Following its ongoing non-compliance, FIU-IND directed the Ministry of Electronics and Information Technology (MEITY) to restrict access to Bybit’s website under the provisions of the Information Technology Act, 2000.

Prior to this enforcement, Bybit had already suspended its services in India for a few weeks, citing “recent regulatory developments” and compliance challenges. The exchanges decision to halt operations came as Indian authorities ramped up their scrutiny of unregistered crypto platforms.

Bybits Efforts to Resume Operations

Despite the setback, Bybit is actively working toward compliance. The exchange applied for a Virtual Digital Asset Service Provider (VDASP) license on June 26, 2024, which would allow it to legally operate in India once approved.

Bybits India country manager, Vikas Gupta, previously stated that they expected to obtain full regulatory approval “within the coming weeks.” However, recent developments suggest that the approval process may take longer than anticipated.

Meanwhile, conflicting reports have emerged regarding Bybit‘s regulatory status. Initially, sources indicated that Bybit had successfully registered with FIU-IND and settled its fine, citing a press release from the exchange. However, a spokesperson later withdrew this statement, creating uncertainty about Bybit’s current compliance standing.