India: Financial Intelligence Unit issued ruling against Bybit for non-compliance of registration requirements under anti money laundering and counter financing of terrorism regulations

On 31 January 2025, the Financial Intelligence Unit-India (FIU-IND) issued a ruling against Bybit, a virtual digital asset service provider (VDA SP) with a penalty of INR 9.27 crore (approximately USD 1.11 million). Bybit failed to comply with business registration requirements under the Prevention of Money Laundering Act, 2002 (PMLA) and related regulations. As a VDA SP, Bybit is classified as a 'reporting entity' under the PMLA, requiring it to follow specific guidelines and regulations. The company failed to secure mandatory registration with FIU-IND, even as it continued to expand its services in the Indian market. Bybit's non-compliance led to its operations being blocked by FIU-IND in coordination with the Ministry of Electronics and Information Technology under the Information Technology Act, 2000. It was highlighted that Bybit did not adhere to the registration requirements despite FIU-IND issuing the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) guidelines in March 2023 and a circular published in October 2023 outlining the registration obligations for VDA SP.