India
Legal to operate, punishing to operate in. Mandatory FIU-IND registration, a 30% flat tax and a 1% TDS that structurally suppresses trading volume.
Who regulates this
Financial Intelligence Unit — IndiaFIU-IND
Virtual Digital Asset service providers as reporting entities under the Prevention of Money Laundering Act, following the March 2023 notification.
Licences and permissions
FIU-IND registration as a Reporting Entity
Exchange, transfer, safekeeping and administration of virtual digital assets.
Mandatory before operating. FIU-IND has issued show-cause notices and blocking directions against offshore platforms serving Indian users without it.
What it takes
Capital
No prudential capital requirement. There is no comprehensive market-conduct regime to attach one to.
Timeline
Registration is comparatively quick where the AML programme and documentation are genuinely in place.
Substance
An Indian entity, an Indian Principal Officer and a Designated Director under PMLA.
Where a software vendor sits
The obligation attaches to the person carrying on VDA activity. A foreign software vendor is not a reporting entity by virtue of supplying software — but serving Indian users through your own platform, unregistered, is criminal exposure under PMLA rather than a civil matter.
What catches people out
The 1% TDS on every transfer is the defining commercial fact. It compounds against active trading and has driven measurable volume offshore since introduction. Model your unit economics against it before committing.
Verify this yourself
We would rather you checked. These are the primary and authoritative secondary sources behind the summary above.