Crypto license in India
India operates an advantageous Virtual Asset Service Provider registration framework that is open to foreign entities. Since March 2023, all entities providing virtual digital asset services can register with the Financial Intelligence Unit of India (FIU-IND) under the Prevention of Money Laundering Act. This registration is open to VASPs worldwide, and is required to operate in India. Since it is a VASP registration, it does provide the benefits of any other crypto licenses.
| Quick Facts | Details |
|---|---|
| Regulatory Authority | Financial Intelligence Unit India (FIU-IND) |
| Timeframe | 4-7 months |
| Government fees | None |
| Minimal capital | None |
| Key advantages | One of cheapest and simple VASP registration |
Unlike traditional licensing frameworks found in other jurisdictions, India requires VDA SPs to become reporting entities under its Anti Money Laundering regulations. This approach provides regulatory compliance while maintaining operational flexibility for crypto businesses. Proper management and monitoring of financial transactions is essential for legal compliance and operational continuity.
Registering a foreign entity as a VDASP in India with LegalBison is therefore an effective and straightforward path to operating your crypto company legally:
- A very straightforward framework: composed of a classical AML-CFT law enforced by the FIU India through guidelines for crypto services providers;
- An opportunity for advantageous corporate structures: allowing for foreign registration means that a crypto project can leverage the choice of jurisdiction for its legal entity;
- Cost-effective crypto license: the Indian VDASP registration is among the cheapest options available for crypto entrepreneurs willing to operate legally;
- Flexible on the types of crypto activities that can be conducted: the Indian framework isn’t limited to crypto exchanges and token issuers, it covers other activities such as transferring virtual digital assets.
India’s registration-based approach offers a pragmatic path for VDASPs seeking regulatory compliance without the traditional barriers associated with conventional licensing systems. Going for a crypto license in India with LegalBison will help you achieve global recognition, enhance international credibility and facilitate cross-border partnerships.
Legal experts in designing solutions for crypto licensing worldwide.
Certified ACAMS consultant with 5+ years experience in compliance and FinTech regulations.
Regulatory overview: Financial Intelligence Unit India (FIU-IND) and PMLA framework
The Financial Intelligence Unit India operates under the Ministry of Finance as the primary regulatory authority for virtual digital asset service providers. Through the March 7, 2023 notification, the prevention of money laundering act brought all VDASPs under comprehensive anti money laundering oversight. And as this framework is a requirement to offer crypto assets related services in India, it is not limited to Indian companies, making it available to foreign entities.
Section 2(1)(wa) of the Money Laundering Act 2002 specifically defines virtual asset service providers as reporting entities, establishing mandatory compliance obligations for any entity offering virtual digital asset services to Indian market participants. Registered VASPs are tasked with conducting customer due diligence and maintaining transaction records for five years as part of compliance. Entities must file Suspicious Transaction Reports (STRs) and submit high-value transaction data to the FIU-IND. As part of the registration procedure, applicants must create an account on FIU IND’s FINnet Gateway platform through the official FIU IND website. This regulatory framework aligns India with international standards set by the financial action task force.
The registration framework covers diverse virtual asset service providers including:
- Crypto exchanges facilitating virtual digital asset trading
- Wallet providers offering custody solutions for virtual assets
- NFT platforms enabling governance tokens and digital collectible transactions
- VDA service providers offering institutional services for virtual digital assets
This comprehensive coverage ensures that all entities handling virtual digital assets operate within India’s regulatory compliance framework, providing market participants with enhanced financial transparency and protection against illicit financial activities.
Compliance with the Indian FIU rules reduces exposure to regulatory risks associated with money laundering and terrorist financing. Unregistered entities are at a higher risk of being exploited by criminals, leading to potential involvement in money laundering and terror financing scandals.
What are the key advantages of a foreign India VASP Registration
Obtaining a crypto license in India provides foreign virtual asset service providers with significant operational and competitive advantages in the rapidly evolving industry.
- Recognized by banks and financial institutions mean a significantly higher likeliness of being green lighted in the process of negotiating the opening of a corporate account for your operations. VDA Service Providers, by demonstrating their soundness to the Indian regulator, shows that its operations are legal and do not incur the level of risk of non-regulated crypto companies.
- Accessible requirements for registration and compliance. The regulatory framework is focused on preventing financial crimes and therefore rely on the Financial Action Task Force’s recommendations (FATF). This means fairly standard compliance requirements, that are easily fulfilled with the assistance of a seasoned legal partner such as LegalBison.
- Trustworthiness among your customers, as the majority of crypto assets users prefer dealing with registered virtual asset service providers. The registration certificate demonstrates commitment to regulatory compliance and financial transparency, significantly enhancing market credibility. Transparency and trust are facilitated by FIU registration as it signals compliance with regulatory standards to clients and stakeholders.
- Stable jurisdiction and framework. Registered virtual digital asset service providers in India benefit from regulatory clarity, reducing business risks associated with changing compliance requirements. This stability enables long-term strategic planning and sustainable growth.
- Cheap and cost-effective, as there are no application fees, no renewal fees, and minimal costs relative to AML-KYC compliance. The process also doesn’t require the deposit and maintenance of a defined authorized share capital. The Indian framework is one of the most competitive out there in terms of costs.
Positive results, positive feedback
LegalBison excels at adapting to challenges and demonstrates a perfect understanding of our business needs.
As a result of the fruitful cooperation with LegalBison, Yellow Card obtained a VASP registration, fast and without any legal complications.
LegalBison helped us navigate a space that’s often uncertain and complex, which gave us the confidence to move forward with our project.
I highly recommend Legal Bison to any entrepreneur or business seeking top-notch services for their company formation. Their commitment to excellence and customer satisfaction is truly commendable.
Quick set-up and straightforward process. It was a smooth process, we are happy to have chosen LegalBison as our Partner for incorporations, globally.
Very proactive, responsive, and able to provide solutions and advice. The firm is familiar with the new industry of blockchain and cryptocurrency
What are the application requirements for a foreign Indian crypto license
Successfully obtaining reporting entity status requires meeting specific regulatory requirements designed to ensure compliance with anti money laundering standards and effective regulatory oversight.
- Corporate entity requirements: Virtual asset service providers must establish either an Indian company or demonstrate offshore entity compliance when serving the Indian market;
- Principal officer appointment: The Prevention of Money Laundering Act mandates appointment of a designated director and a principal officer responsible for ensuring compliance with the FIU IND regulations. This individual oversees anti money laundering procedures, suspicious transaction reporting, and ongoing regulatory compliance.
- AML/KYC policy implementation: Comprehensive AML-KYC policies must address customer due diligence, suspicious transaction identification, and compliance with CFT guidelines. These policies should align with the FATF’s recommendations and enable effective combat money laundering operations.
- Technology infrastructure standards: Crypto businesses require robust transaction monitoring systems, secure record-keeping infrastructure, and cybersecurity measures protecting customer funds and transaction data. These systems must support transaction reporting systems and regulatory reporting requirements.
- Additional compliance elements: No prior virtual asset experience is required for registration, though demonstrating understanding of regulatory compliance and risk management enhances application success. Entities must classify as reporting entities under relevant provisions of the prevention of money laundering act.
LegalBison’s expertise in India crypto company registration ensures your virtual digital asset business meets all regulatory requirements efficiently and effectively.
What is the step-by-step registration process of a VDA Service Provider in India?
The registration process involves four distinct stages, each with specific deliverables and timelines for achieving reporting entity status.
Stage 1 – Entity Preparation
Company formation or offshore entity compliance verification, principal officer appointment, and initial anti money laundering policy development. This stage establishes the corporate foundation necessary for virtual asset service provider operations.
Output: Established corporate entity with appointed principal officer
Stage 2 – Documentation & Application
FINnet Gateway account creation, comprehensive document submission including AML policies, technology infrastructure verification, and compliance system implementation. This stage prepares all materials required for FIU IND regulations compliance.
Output: Complete application package with supporting documentation
Stage 3 – FIU-IND Review
Authority verification of submitted documentation, principal officer background checks, and compliance infrastructure assessment. The Indian regulatory authorities conducts thorough review to ensure regulatory compliance standards.
Output: Authority approval and verification completion
Stage 4 – Registration Completion
Final approval processing and reporting entity status activation. Virtual digital asset service providers receive confirmation of successful registration and begin operational compliance obligations.
Output: Active reporting entity status and registration certificate
Stage 5 – Banking options for a VASP registered in India
With LegalBison’s assistance, it is possible after VASP registration to open a corporate account for your operations.
Output: Opening of a corporate account.
Costs and Fees for an India VASP license
Understanding the financial investment required for VDASP registration in India helps businesses plan their regulatory compliance strategy effectively.
- No government registration fees;
- No annual renewal fees;
- No minimum required share capital;
- Taxes are paid in the company of registration, India doesn’t levy taxes on foreign-based VDASPs.
This makes India one of the cheapest crypto licensing option available on the global market. Most of the budgeting to plan for encompasses the due preparation of the compliance documents and the application, as offered by LegalBison.
Regulatory compliance requirements for virtual digital asset service providers after securing a VASP license in India
Successful FIU-IND registration establishes ongoing responsibilities that crypto licensed companies must maintain for continued regulatory compliance.
- Ongoing reporting of suspicious transactions: Registered reporting entities must submit regular suspicious transaction reports to the FIU, identifying potentially illicit financial activities and supporting law enforcement agencies in combat financial crimes efforts.
- Maintaining a record of transactions: VASPs must maintain comprehensive transaction records, customer data, and compliance documentation. These records support regulatory oversight and enable effective cooperation with regulatory authorities during investigations.
- Annual compliance audits: Regular system audits ensure continued adherence to AML standards and FIU-IND regulations. These audits verify transaction monitoring effectiveness and overall compliance infrastructure performance.
- Responsibilities of the Principal Officer: The designated principal officer maintains ongoing responsibilities for regulatory compliance, staff training, and system updates. This role ensures continuous adherence to prevention of money laundering act requirements.
- Maintenance of proper monitoring systems: Unlike traditional licenses requiring renewal, the registration model demands continuous compliance monitoring rather than periodic renewal processes. This approach provides regulatory flexibility while maintaining oversight effectiveness. India follows the Financial Action Task Force (FATF) Travel Rule, requiring providers to share sender and receiver information for transactions exceeding 50,000 INR (about 564 USD).
All-in-all, the compliance requirements of an Indian crypto license are standard. The proper preparation of compliance documents and assistance in keeping track of the necessary actions to be conducted is key to operate without hassle. LegalBison offers the complete preparation of required documents and everything necessary to apply for a VASP license in India and to operate according to the regulations.
Common misconceptions about the Indian crypto license
No, cryptocurrencies are not “unregulated” nor “banned” in India. The Prevention of Money Laundering Act of 2002 specifically provides regulation of the crypto ecosystem in India.
No, offshore crypto companies aren’t exempt from registration in India, if they are willing to target the Indian market. The VDASP registration is both a globally recognized crypto framework and a mandatory step to providing crypto assets services to Indian customers.
No, registration isn’t limited to crypto exchanges. All virtual asset service providers including wallet providers, NFT platforms, and governance tokens services must register
No, the VDASP guidelines aren’t published by the Reserve Bank of India. The FIU India is the one reference body behind the crypto framework in India.
What are the texts composing the legal framework of the Indian crypto license
The legal framework behind the Virtual Digital Assets Services Providers registration status in India is the Prevention of Money Laundering Act of 2002. The latest amendments include virtual digital assets services providers into the scope of this regulation, that aims to enforce the FATF recommendations in India and prevent financial crime.
The Act is completed by the AML & CFT Guidelines For Reporting Entities Providing Services Related To Virtual Digital Assets, issued in 2023 by the FIU IND. These guidelines, as the name indicates, providing guidance and information for registered VASPs in India, in regards to properly comply with AML-CFT and KYC requirements and with Indian regulation.
Costs and Fees for an India VASP license
Understanding the financial investment required for VDASP registration in India helps businesses plan their regulatory compliance strategy effectively.
- No government registration fees;
- No annual renewal fees;
- No minimum required share capital;
- Taxes are paid in the company of registration, India doesn’t levy taxes on foreign-based VDASPs.
This makes India one of the cheapest crypto licensing option available on the global market. Most of the budgeting to plan for encompasses the due preparation of the compliance documents and the application, as offered by LegalBison.
Regulatory compliance requirements for virtual digital asset service providers after securing a VASP license in India
Successful FIU-IND registration establishes ongoing responsibilities that crypto licensed companies must maintain for continued regulatory compliance.
- Ongoing reporting of suspicious transactions: Registered reporting entities must submit regular suspicious transaction reports to the FIU, identifying potentially illicit financial activities and supporting law enforcement agencies in combat financial crimes efforts.
- Maintaining a record of transactions: VASPs must maintain comprehensive transaction records, customer data, and compliance documentation. These records support regulatory oversight and enable effective cooperation with regulatory authorities during investigations.
- Annual compliance audits: Regular system audits ensure continued adherence to AML standards and FIU-IND regulations. These audits verify transaction monitoring effectiveness and overall compliance infrastructure performance.
- Responsibilities of the Principal Officer: The designated principal officer maintains ongoing responsibilities for regulatory compliance, staff training, and system updates. This role ensures continuous adherence to prevention of money laundering act requirements.
- Maintenance of proper monitoring systems: Unlike traditional licenses requiring renewal, the registration model demands continuous compliance monitoring rather than periodic renewal processes. This approach provides regulatory flexibility while maintaining oversight effectiveness. India follows the Financial Action Task Force (FATF) Travel Rule, requiring providers to share sender and receiver information for transactions exceeding 50,000 INR (about 564 USD).
All-in-all, the compliance requirements of an Indian crypto license are standard. The proper preparation of compliance documents and assistance in keeping track of the necessary actions to be conducted is key to operate without hassle. LegalBison offers the complete preparation of required documents and everything necessary to apply for a VASP license in India and to operate according to the regulations.
Common misconceptions about the Indian crypto license
No, cryptocurrencies are not “unregulated” nor “banned” in India. The Prevention of Money Laundering Act of 2002 specifically provides regulation of the crypto ecosystem in India.
No, offshore crypto companies aren’t exempt from registration in India, if they are willing to target the Indian market. The VDASP registration is both a globally recognized crypto framework and a mandatory step to providing crypto assets services to Indian customers.
No, registration isn’t limited to crypto exchanges. All virtual asset service providers including wallet providers, NFT platforms, and governance tokens services must register
No, the VDASP guidelines aren’t published by the Reserve Bank of India. The FIU India is the one reference body behind the crypto framework in India.
What are the texts composing the legal framework of the Indian crypto license
The legal framework behind the Virtual Digital Assets Services Providers registration status in India is the Prevention of Money Laundering Act of 2002. The latest amendments include virtual digital assets services providers into the scope of this regulation, that aims to enforce the FATF recommendations in India and prevent financial crime.
The Act is completed by the AML & CFT Guidelines For Reporting Entities Providing Services Related To Virtual Digital Assets, issued in 2023 by the FIU IND. These guidelines, as the name indicates, providing guidance and information for registered VASPs in India, in regards to properly comply with AML-CFT and KYC requirements and with Indian regulation.
FAQ - Crypto license in India
No, only virtual asset service providers offering services to others require registration. Individual trading of virtual digital assets does not require reporting entity status or regulatory compliance beyond standard tax obligations.
Complete registration typically requires 4-7 months with proper preparation and documentation. This timeline includes entity preparation, application submission, regulatory review, and final approval stages.
Registration enables exchange services, custody solutions, wallet provision, NFT platform operations, and institutional virtual digital asset services. The scope covers comprehensive virtual asset service provider activities.
Regulatory clarity has improved significantly, with government stance evolving toward comprehensive oversight rather than prohibition. The registration framework provides legitimate operators with clear compliance pathways.
Non compliance results in website blocking, legal penalties, loss of banking access, and potential enforcement actions. Regulatory authorities actively pursue non compliant entities offering virtual digital asset services.
Yes, offshore entities serving the Indian market can achieve compliance through proper registration and regulatory adherence. Physical presence requirements vary based on service scope and customer base.
For your company and for your clients: not really. India uses a registration model creating reporting entities under anti money laundering law, distinct from traditional licensing systems. This approach provides regulatory compliance without conventional licensing barriers.
Why Choose LegalBison for India VASP Registration
Our comprehensive approach covers entity formation through compliance implementation, ensuring your virtual digital asset business achieves full regulatory compliance efficiently. We understand the rapidly evolving industry and provide deep knowledge of Indian regulators’ expectations and requirements.
End-to-End Support Services:
- – Corporate entity establishment and principal officer appointment
- – Comprehensive AML-KYC policy development
- – Technology infrastructure guidance and compliance system setup
- – Ongoing regulatory compliance support
Our team provides continuous guidance for post-registration compliance obligations, helping virtual asset service providers maintain reporting entity status while focusing on business growth. We offer regular regulatory updates and proactive guidance for evolving compliance requirements.
Ready to establish your virtual digital asset business with an Indian crypto license ? Contact our experts for a free consultation and discover how we can streamline your path to regulatory compliance.
Legal experts in designing solutions for crypto licensing worldwide.
Certified ACAMS consultant with 5+ years experience in compliance and FinTech regulations.