**Summary:**
In response to a parliamentary inquiry on July 21, 2025, regarding illegal offshore cryptocurrency platforms, the Ministry of Finance clarified the Government of India's current stance. As of that date, crypto virtual assets are not regulated in India, making the determination of legality or illegality of specific platforms not applicable. However, the Financial Intelligence Unit India (FIU-IND) registers Virtual Asset Service Providers (VASPs), both domestic and offshore catering to Indian users, under the Prevention of Money Laundering Act (PMLA) to ensure oversight from an anti-money laundering and countering the financing of terrorism (AML/CFT) perspective. FIU-IND maintains a dynamic list of unregistered VASPs.
The Finance Act, 2022, introduced Section 194S in the Income-tax Act, 1961, mandating a 1% Tax Deducted at Source (TDS) on the transfer of Virtual Digital Assets (VDAs), applicable to all transactions, including those involving offshore entities, if the income is taxable in India. The Reserve Bank of India (RBI) has issued sector-wide advisories warning users, holders, and traders of virtual currencies or crypto assets about potential economic, financial, operational, legal, and security risks, without commenting on individual platforms.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Department of Economic Affairs: A department within the Ministry of Finance, Government of India.
Shri Putta Mahesh Kumar: Member of Parliament who raised a question in the Lok Sabha.
Shri Krishna Prasad Tenneti: Member of Parliament who raised a question in the Lok Sabha.
Pankaj Chaudhary: Minister of State in the Ministry of Finance, who provided the answer to the question.
Financial Intelligence Unit FIUIND: The Financial Intelligence Unit - India, responsible for registering Virtual Asset Service Providers (VASPs) under the Prevention of Money Laundering Act (PMLA).
Prevention of Money Laundering Act PMLA: An Indian law to prevent money laundering and to provide for confiscation of property derived from money laundering.
Finance Act, 2022: An act of the Indian Parliament that introduced Section 194S in the Income-tax Act, 1961.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO.15
TO BE ANSWERED ON MONDAY, JULY 21, 2025/ ASHADHA 30, 1947 (SAKA)
Action against Illegal Offshore Cryptocurrency Platforms
15. Shri Putta Mahesh Kumar:
Shri Krishna Prasad Tenneti:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has conducted any study/survey regarding the illegal offshore
cryptocurrency platforms presently functioning in the country;
(b) if so, the list of such platforms, the country of origin and total valuation during the last five
years;
(c) the details regarding the action taken by the Government to curb such illegal platforms; and
(d) whether the Government has undertaken any activities/campaign to raise awareness
regarding the dangers of using such illegal platforms amongst the common man of the country,
if so, the details thereof and if not, the reasons therefor?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (d): At present, crypto / virtual assets are not regulated in India. Consequently, the
question of the legality or illegality of specific crypto platforms does not arise as on date.
However, to ensure oversight from an anti-money laundering and countering the financing of
terrorism (AML/CFT) perspective, the Financial Intelligence Unit (FIU-IND) registers Virtual
Asset Service Providers (VASPs) under the Prevention of Money Laundering Act (PMLA).
This registration requirement applies equally to domestic and offshore platforms that cater to
users based in India. FIU-IND therefore maintains a dynamic list of virtual asset service
providers who are not registered with them. Separately, the Finance Act, 2022, introduced
Section 194S in the Income-tax Act, 1961, mandating a 1% Tax Deducted at Source (TDS) on
the transfer of Virtual Digital Assets (VDAs). This applies to all transactions, including those
involving offshore entities, if the income is chargeable to tax in India. Further the Reserve Bank
of India (RBI) has issued advisories warning users, holders, and traders of virtual currencies or
crypto assets about the potential risks, including economic, financial, operational, legal, and
security concerns. These advisories have been sector-wide and have not commented on
individual platforms.
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