India tightens crypto checks with live selfies, location tracking

India has introduced stricter requirements for cryptocurrency exchanges, mandating live selfies and geo-tagging for users during onboarding.

The Financial Intelligence Unit (FIU) now requires exchanges to verify users’ presence through liveness detection.

The updated rules, issued on January 8, also require geographical tracking to confirm user locations.

These measures aim to strengthen anti-money laundering (AML) and know-your-customer (KYC) protocols in the digital asset sector.

🧠 Food for thought

Implications, context, and why it matters.

Onboarding rules include live selfies, geo-tagging, and liveness checks for VDA service providers in India. FIU-IND says these duties are activity based, not tied to physical presence 1. There were 49 VDA SPs as of March 2025 2, rising to 50 on October 1, 2025 1. FIU-IND sent notices to 25 offshore platforms for illegal operations under PMLA, then ordered app and URL takedowns 1.
The FIU’s October 2025 list names Paxful, Changelly, and BitMEX 1. TechCrunch cited data that 14 affected exchanges held over $9 billion in assets and nearly $20 billion in 24-hour trading volume on October 1 3.
FIU-IND found use of crypto for hawala, gambling, scams and fraud plus one case tied to an illegal adult content website based on Suspicious Transaction Reports from registered exchanges 2. Unregistered platforms likely create greater risk without any reporting duties.

Of the 49 registered VDA service providers as of March 2025, 45 are India based 2. These firms need liveness detection and geo-KYC to meet the January 8 requirements, since FIU-IND now asks for live demos of compliance systems during registration reviews 3.
RegTech vendors that offer video KYC, anti-spoofing, and blockchain analytics can sell as compliance partners as FIU-IND now needs cybersecurity audit certificates plus detailed tax filings from exchanges 3.
Registered exchanges must run risk based customer due diligence plus sanctions screening, then file Suspicious Transaction Reports that analyze beneficial wallet ownership and transfers between hosted and un-hosted wallets 2. That creates recurring revenue for monitoring and reporting platforms.