Last updated on January 13th, 2026 at 01:47 pm
Quick Breakdown
- Crypto platforms must verify their identity with a live selfie, government ID, email, and mobile number before signing up.
- High-risk users must update their KYC every six months, while others do so once a year. Exchanges also record users’ IP addresses and locations.
- Privacy coins, mixers, and unregulated token offerings are banned to prevent money laundering and illicit activity.
India’s Financial Intelligence Unit (FIU) has released new rules that make KYC checks stricter for crypto platforms. These changes are meant to improve compliance, stop illegal activity, and lower risks from privacy tools and unregulated tokens.
🇮🇳INDIA ( FIU) INTRODUCES STRICTER KYC NORMS FOR NEW CRYPTO USERS.
-> Crypto platforms must now verify users using a live selfie.
-> Exchanges must collect user location, IP address, and account creation time.
-> User bank accounts must be verified using a small test… pic.twitter.com/DQ9if0J0KM— CryptoShyam – Shyam Kumar Sen (@CryptoShyam) January 12, 2026
Stricter verification requirements
Under the new rules, crypto exchanges must require users to submit live selfie verification, using software to confirm physical presence via eye blinking or head movement to prevent deepfake misuse. Additional government-issued photo identification, such as passports, Aadhaar, or voter ID, is mandatory. Users must also verify their email address and mobile number, and exchanges are instructed to conduct a small test transaction to the user’s linked bank account before granting full platform access.
Exchanges are required to capture IP addresses, geolocation, timestamps, and device information at registration. KYC updates must be completed every 6 months for high-risk clients and annually for all other users. These measures apply to all regulated crypto platforms operating in India.
Ban on privacy tools and unregulated tokens
The FIU reiterated its opposition to privacy coins, mixers, tumblers, and obfuscation techniques designed to conceal ownership and transaction history. Exchanges are instructed to block any transactions linked to these tools. Additionally, the regulator strongly discourages Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs), citing heightened risks of money laundering and terrorist financing.
All registered crypto entities must implement robust controls to enforce these restrictions and ensure compliance with India’s regulatory framework. The FIU emphasized that platforms failing to adopt these measures could face regulatory action, reflecting India’s ongoing effort to tighten oversight of digital assets and mitigate financial crime risks.
These updates mark a significant step in India’s effort to enhance transparency and security in the crypto sector while balancing innovation with regulatory enforcement.
Separately, the Indian Income Tax Department has highlighted significant risks associated with virtual digital assets (VDAs), including cryptocurrencies, in a presentation to the Parliamentary Standing Committee on Finance.
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