What new rules has India's FIU implemented for crypto exchanges?

India's FIU has introduced stringent AML/KYC protocols, including mandatory live selfie verification and geographical tracking for crypto exchange users.

How will crypto exchanges verify user identity under the new Indian guidelines?

Exchanges must use liveness detection technology with live selfies and collect precise location and IP data during user onboarding.

What is the 'penny-drop' method required by India's FIU for crypto users?

The 'penny-drop' method involves processing a small Re 1 transaction to confirm that the provided bank account is active and belongs to the registrant.

Home / Business and Economy / India Mandates 'Live Selfies' for Crypto Users

India Mandates 'Live Selfies' for Crypto Users

11 Jan

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Summary

New AML/KYC protocols require 'live selfies' and geographical tracking.
Crypto exchanges must verify user identity using liveness detection software.
A Re 1 transaction 'penny-drop' test confirms bank account activity.

India Mandates 'Live Selfies' for Crypto Users

India's Financial Intelligence Unit (FIU) has introduced rigorous Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines for cryptocurrency exchanges, effective January 8th. These new regulations mandate that Virtual Digital Asset (VDA) service providers implement stricter onboarding processes. Users are now required to submit a 'live selfie' with liveness detection technology to confirm their physical presence and prevent fraudulent use of static images or deepfakes.

Further enhancing security, exchanges must record precise user location data, including latitude, longitude, date, timestamp, and IP address, at the point of account creation. The 'penny-drop' method, involving a nominal Re 1 transaction, is now compulsory to validate the active status and ownership of a user's bank account. In addition to a Permanent Account Number (PAN), users must provide a secondary identification, OTP verification for email and phone, and undergo KYC updates every six to twelve months depending on risk level.