Bybit Settles With India for $1 Million Following Compliance Violations
Crypto Exchange, Bybit, Resolves PMLA Non-Compliance Issue Amid Increased Regulatory Scrutiny From the Indian Authorities
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has settled with Indian authorities for ₹9.27 crore approx. $1.06 million after failing to register under the country’s anti-money laundering laws.
Moreover, the Financial Intelligence Unit (FIU) imposed the penalty on January 31, citing violations of the Prevention of Money Laundering Act.
On February 5th, the company announced its settlement with the FIU and its official registration as a fully compliant exchange with the agency. However, the resolution follows months of regulatory crackdowns and a temporary halt to Bybit’s operations in India.
Bybit Fined Over $1 Million For Operating Without Complete License
India’s FIU classified Bybit as a Virtual Digital Asset Service Provider (VDA SP), requiring mandatory registration under Section 2(1)(WA) of the PMLA. However, the exchange continued expanding its services in India without securing approval, consequently prompting regulators to block access to its website.
“Bybit’s persistent non-compliance forced decisive action to suspend its operations,” the FIU stated in its report. The restriction limited Bybit users in India to withdrawals only.
However, after registering with the FIU, the exchange reopened cryptocurrency trading, including Bitcoin and Ethereum, and derivatives markets.
Notably, with the fine settled, Bybit is now pursuing a Virtual Digital Asset Service Provider (VDASP) license to be able to operate freely in India. The application submitted on June 26, 2024, would enable the platform to operate without disruptions, provided it adheres to ongoing regulations.
India’s Strict Regulatory Stance
India, the world’s top country for crypto adoption has always maintained an aggressive stance toward unregistered crypto platforms. The country imposes strict reporting requirements and crippling penalties for non-compliance.
In December 2023, the government mandated all virtual asset service providers register with the FIU and comply with strict KYC procedures. Nine exchanges including Binance were subsequently blocked for operating without complete licenses. Binance has since re-entered the market after settling with the agency.
