Report: India Tightens Kyc Requirements For Crypto User Onboarding 2026

Tax and other regulatory agencies in India claim that cryptocurrencies and permissionless blockchain tech undermine tax collection.

India’s Financial Intelligence Unit (FIU), a regulatory agency that sets anti-money laundering and know-your-customer regulations, issued new guidelines tightening rules for onboarding users to crypto platforms.

The new rules force regulated crypto exchanges to verify users through live selfie pictures and geographic location verification, according to The Times of India.

The live selfie pictures are verified with software that tracks users' eye and head movements to prevent AI deep fakes from being used to bypass the know-your-customer (KYC) verification process.

Exchanges will also be required to collect the geolocation and IP addresses at the time of account creation, along with a timestamp of when the account was created.

The exchanges must verify user bank accounts by sending a small transaction to the account to satisfy anti-money laundering (AML) requirements.

Users will now be required to submit additional government-issued photo identification to exchanges and verify their email and mobile numbers to create an account with a registered crypto exchange.

The new rules reflect the regulatory stance toward cryptocurrencies and digital assets in India, which has one of the largest total addressable markets in the world. India’s population of over 1.4 billion people coming onchain could bring a fresh wave of investment to crypto.

Related: India’s central bank urges countries to prioritize CBDCs over stablecoins

Officials with India’s Income Tax Department (ITD) met with parliamentary lawmakers on Wednesday and argued that cryptocurrencies and decentralized finance platforms undermine tax enforcement.

Source: CoinTelegraph