The Financial Intelligence Unit of India (FIU-IND) has reasons to believe that the ByBit crypto exchange was in violations of the Prevention of Money Laundering Act. In a fresh development, the FIU has levied a penalty of Rs. 9.27 crore on ByBit for continuing to operate in India without bringing its operations in compliance with India’s legal guidelines. The Indian government is trying to maintain a strict oversight over the country’s crypto ecosystem. The aim is to curb the exploitation of virtual assets for illegal activities like money laundering and terror financing.
Headquartered in Dubai, ByBit was founded in 2018 by Ben Zhou. The crypto company claims to cater to over 40 million users globally.
The FIU had been examining ByBit’s operations in India for a while. In recent months, officials at the exchange were directed to submit written documentation as well as verbal explanations to the FIU, detailing its operations in the country.
After conducting a thorough examination of the submissions, FIU-IND director Vivek Aggarwal found Bybit liable of the charges for various violations. According to an official press release, the FIU found the exchange had not obtained its mandatory approval to legalise the status of its business in India.
“The persistent and continuous non-compliance caused FIU-IND to block their (ByBit’s) websites to stop operations under the Information Technology Act, 2000 through the Ministry of Electronics and Communication Technology (MEITY),” the release noted.
Last year, the exchange had integrated India’s eRupee CBDC with its peer-to-peer (P2P) transaction service owing to multiple requests from Indian merchants. As the FIU’s probe over its business in India intensified, ByBit announced earlier in January that it was suspending its services in India.
On January 10, the exchange posted a statement that said, “Due to recent developments from Indian regulators and in continuation of previously implemented restrictions, we regret to inform you that, effective January 12, 2025, Indian users will temporarily be unable to open new trades or access any products on the Bybit platform. The only exception will be withdrawals, which will remain available for your convenience.”
In addition to its troubles in India, the exchange has found itself facing legal action in Malaysia, as well. In December last year, the Securities Commission Malaysia (SC) directed ByBit to halt its services for not being compliant with local regulatory requirements.
The founder of the exchange, Zhou, has not yet commented on either of the developments. ByBit is also yet to share any details of steps taken at the firm to align its operations with the rules of different countries it operates in.
