When the Financial Intelligence Unit-India (FIU-IND) the government watchdog that now controls every crypto trading venue in the country started blocking non‑registered platforms in early 2024, Indian traders were forced to pick up the pieces. The result? A clear, government‑approved list of crypto exchanges banned in India foreign or domestic platforms that failed to register with the FIU‑IND and therefore cannot legally accept Indian rupees. This article tells you exactly which exchanges are on the blacklist, why they were shut down, and what you can do to keep your crypto safe.
Key Takeaways
- All exchanges must be FIU‑IND registered to operate legally in India.
- As of October2025, the most prominent banned platforms include Binance, KuCoin, Coinbase, and Bybit.
- Domestic platforms such as CoinDCX and WazirX are fully compliant and see massive user inflows.
- Using a banned exchange can lead to frozen funds, banking blocks, and possible tax penalties.
- Check an exchange’s FIU registration number on the official portal before depositing INR.
Why India Cracked Down on Crypto Exchanges
The crackdown traces back to the Reserve Bank of India (RBI) India’s central bank, which issued the 2018 circular prohibiting banks from dealing with virtual currencies. While the Supreme Court later struck down the blanket ban, the government kept a tight grip on the *exchange* layer. In February2025, Section285BAA of the Finance Bill mandated that every crypto platform serving Indian residents must register with the FIU‑IND, maintain six‑year transaction archives, and file detailed reports. Failure to comply triggers website blocking, banking bans, and investigations by the Enforcement Directorate.
List of Exchanges Currently Banned (Jan2024-Oct2025)
| Exchange | Origin | Ban Reason | Legal Status in India |
|---|---|---|---|
| Binance world’s largest crypto exchange by volume | International (Cayman Islands) | No FIU‑IND registration; unpaid penalties | Banned - INR deposits blocked |
| KuCoin popular for alt‑coin listings | International (Seychelles) | Failed to file transaction reports | Banned - website inaccessible in India |
| Coinbase US‑based exchange known for compliance tools | International (USA) | Pending FIU registration, data‑retention gaps | Banned - no Indian bank tie‑ups |
| Bybit derivatives‑focused platform | International (British Virgin Islands) | Unpaid compliance fines, AML concerns | Banned - trading API shut down |
| Bitfinex | International (British Virgin Islands) | Repeated AML violations, no FIU filing | Banned - user accounts frozen |
| Kraken | International (USA) | Did not submit FIU registration by deadline | Banned - fiat on‑ramps disabled |
These six exchanges represent the most visible offenders, but the FIU‑IND has issued enforcement notices to dozens of smaller platforms that also lack registration. If a site’s URL suddenly redirects to a government warning page, it’s almost certainly on the banned list.
Legal, FIU‑Registered Exchanges That Indians Can Use
Domestic platforms rushed to fill the void. The biggest FIU‑compliant names include:
- CoinDCX offers over 300 coins, 2,000% deposit growth in 2024
- WazirX backed by Binance’s Indian arm, fully FIU‑registered
- Mudrex focuses on crypto‑powered investment strategies
- ZebPay, Unocoin, CoinSwitch, and BuyUcoin also hold valid registration numbers.
These exchanges enjoy uninterrupted INR deposit/withdrawal pipelines, integrated KYC/AML, and automatic tax‑report generation that aligns with the 31.2% flat tax rate imposed by the Indian Income Tax Act.
How to Verify an Exchange’s FIU Registration
- Visit the official FIU‑IND registry (the URL is public and searchable).
- Enter the exchange’s name or registration number. A valid entry will display the entity’s name, registration date, and compliance status.
- Cross‑check the KYC process. Legitimate platforms will require Aadhaar, PAN, and a live video selfie.
- Confirm that the exchange offers a domestic INR bank account or UPI link. Banned platforms cannot provide these services.
- Look for a clear data‑retention policy (up to six years) in the “Legal” or “Compliance” section of the site.
Any exchange that fails one of these checks should be avoided. Even if an international platform promises “global access,” without FIU registration it will be inaccessible to Indian users.
Risks of Trading on Banned Platforms
Using a black‑listed exchange can lead to three major problems:
- Frozen Funds: Indian banks are instructed to block any INR transfers to unregistered entities, meaning deposits can be seized and withdrawals halted.
- Legal Exposure: The Enforcement Directorate can initiate money‑laundering probes if large, unreported crypto movements are detected on a non‑compliant platform.
- Tax Complications: Since banned exchanges do not issue the required Form16‑style tax statements, you must manually calculate gains. Errors can trigger up to 60% penalties under Section158BA(7).
In short, the convenience of a foreign exchange rarely outweighs the security of a FIU‑registered one.
Practical Steps for Indian Crypto Traders
If you’re still on a banned platform, follow this quick migration plan:
- Withdraw All INR: Move any fiat balance to your linked bank account before the exchange blocks further transfers.
- Transfer Crypto to a Compliant Wallet: Use a personal hardware wallet (e.g., Ledger or Trezor) to hold your assets during the switch.
- Open an Account on a FIU‑Registered Exchange: Complete KYC, link your UPI, and test a small deposit.
- Deposit Crypto: Send your assets from the hardware wallet to the new exchange’s deposit address.
- Generate Tax Reports: Most compliant exchanges now provide downloadable CSVs that match the 31.2% flat tax calculations.
- Delete the Old Account: Remove personal data from the banned platform to reduce exposure.
By the end of the week, you should be fully operational on a legal platform with no risk of frozen funds.
Future Outlook - Will More Exchanges Return?
International giants are still courting the Indian market. Binance announced a $5million compliance fund to meet FIU requirements, while Coinbase plans to launch an Indian subsidiary once it finalizes its data‑retention framework. However, the regulator’s stance remains firm: any exchange that bypasses registration will face immediate blockage. Traders should keep an eye on FIU press releases and treat any “re‑opening” announcements with caution until the official registration number is published.
Frequently Asked Questions
Which crypto exchanges are currently banned in India?
As of October2025, Binance, KuCoin, Coinbase, Bybit, Bitfinex, and Kraken are officially blocked for lacking FIU‑IND registration. The FIU’s public registry lists additional smaller platforms that also face enforcement.
How can I verify if an exchange is FIU‑registered?
Visit the FIU‑IND’s online registry, search by the exchange’s name or registration number, and look for a “Compliant” status. Also confirm that the platform offers INR‑based deposits via UPI or bank transfer.
What happens to my funds if I keep using a banned exchange?
Indian banks will block any INR transfers, and the Enforcement Directorate can freeze your accounts for alleged money‑laundering. You may also face heavy tax penalties for unreported gains.
Can I still trade on foreign exchanges using a VPN?
Technically a VPN can mask your IP, but Indian banks and payment gateways still enforce FIU rules. Any INR deposit will be rejected, and using a VPN does not protect you from legal scrutiny.
What is the tax rate on crypto gains in India?
A flat 31.2% tax applies to all crypto profits, with no set‑offs. Failure to disclose gains can attract penalties up to 60% of the undisclosed amount under Section158BA(7).
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