The Indian Financial Intelligence Unit (FIU) has recently issued a set of enhanced regulatory requirements for cryptocurrency exchanges, with significant measures.

Let's first look at the changes at the user level. Going forward, users will need to complete live selfie verification during identity authentication, and the system will also record location, time, and IP address. But that's not enough—users will also need to provide multiple types of identification documents. This means the KYC process for exchanges will be significantly extended, but from an anti-money laundering perspective, it indeed enhances the authenticity of accounts.

For high-risk customers, the FIU requires enhanced due diligence (Enhanced Due Diligence) every 6 months. This relatively long cycle means platforms need to allocate more resources to continuously monitor and evaluate such users.

At the product and service level, the new regulations prohibit exchanges from offering ICO/ITO functions and also ban mixing tools such as tumblers. This directly restricts the scope of platform operations, especially for exchanges looking to expand into fundraising activities.

Platform operators face stricter compliance obligations: they must register with the FIU, report suspicious transactions, and retain all related data for at least 5 years. This tests the infrastructure and cost management of exchanges.

Overall, India continues to strengthen its regulatory stance on crypto assets. While not outright banning, through layered KYC, data retention, and business restrictions, it is shaping a more regulated market order. This approach may serve as a reference for other emerging markets.