FIU-IND Levies Over Rs. 9 Crore Fine on Dubai-Based ByBit Crypto Exchange Citing PMLA Violations

The FIU found that ByBit had not obtained its mandatory approval to conduct business in India.

Written by Radhika Parashar, Edited by Manas Mitul | Updated: 3 February 2025 19:20 IST

FIU-IND Levies Over Rs. 9 Crore Fine on Dubai-Based ByBit Crypto Exchange Citing PMLA Violations

Photo Credit: Facebook/ ByBit

Headquartered in Dubai, ByBit was founded in 2018 by Ben Zhou

Highlights

ByBit claims to be catering to over 40 million users
In January, ByBit temporarily suspended its services in India
The FIU conducted thorough examination of ByBit’s submissions

The Financial Intelligence Unit of India (FIU-IND) has reasons to believe that the ByBit crypto exchange was in violations of the Prevention of Money Laundering Act. In a fresh development, the FIU has levied a penalty of Rs. 9.27 crore on ByBit for continuing to operate in India without bringing its operations in compliance with India's legal guidelines. The Indian government is trying to maintain a strict oversight over the country's crypto ecosystem. The aim is to curb the exploitation of virtual assets for illegal activities like money laundering and terror financing.

Headquartered in Dubai, ByBit was founded in 2018 by Ben Zhou. The crypto company claims to cater to over 40 million users globally.

The FIU had been examining ByBit's operations in India for a while. In recent months, officials at the exchange were directed to submit written documentation as well as verbal explanations to the FIU, detailing its operations in the country.

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After conducting a thorough examination of the submissions, FIU-IND director Vivek Aggarwal found Bybit liable of the charges for various violations. According to an official press release, the FIU found the exchange had not obtained its mandatory approval to legalise the status of its business in India.

“The persistent and continuous non-compliance caused FIU-IND to block their (ByBit's) websites to stop operations under the Information Technology Act, 2000 through the Ministry of Electronics and Communication Technology (MEITY),” the release noted.

Last year, the exchange had integrated India's eRupee CBDC with its peer-to-peer (P2P) transaction service owing to multiple requests from Indian merchants. As the FIU's probe over its business in India intensified, ByBit announced earlier in January that it was suspending its services in India.

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On January 10, the exchange posted a statement that said, “Due to recent developments from Indian regulators and in continuation of previously implemented restrictions, we regret to inform you that, effective January 12, 2025, Indian users will temporarily be unable to open new trades or access any products on the Bybit platform. The only exception will be withdrawals, which will remain available for your convenience.”

In addition to its troubles in India, the exchange has found itself facing legal action in Malaysia, as well. In December last year, the Securities Commission Malaysia (SC) directed ByBit to halt its services for not being compliant with local regulatory requirements.

The founder of the exchange, Zhou, has not yet commented on either of the developments. ByBit is also yet to share any details of steps taken at the firm to align its operations with the rules of different countries it operates in.

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Further reading: Cryptocurrency, ByBit, Crypto Exchange, FIU Registration

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More