India Tightens Crypto Regulations in 2025: Mandatory KYC Update by June 30 Deadline

India’s Crypto Regulation Tightens in 2025: KYC Update Now Mandatory by June 30

India is ramping up efforts to regulate the cryptocurrency industry more strictly in 2025. The Financial Intelligence Unit of India (FIU-IND) has mandated that all crypto exchanges operating in the country complete a comprehensive Know Your Customer (KYC) update for users by June 30, 2025. This directive marks a significant move toward stricter crypto regulations in India, aiming to increase transparency and ensure compliance with tax and anti-money laundering laws.

Why Is India Enforcing a KYC Re-Verification for Crypto?

The FIU’s decision comes after an internal investigation revealed widespread non-compliance with the 1% TDS (Tax Deducted at Source) rule on cryptocurrency transactions. This has raised concerns about money laundering and tax evasion in the Indian crypto market. By requiring exchanges to reverify all user accounts, the FIU aims to close these loopholes and reinforce the Prevention of Money Laundering Act (PMLA).

June 30 Deadline: What Crypto Users and Exchanges Must Do

Crypto exchanges must now ask users to re-submit essential identification documents, including Permanent Account Number (PAN) cards, before the June 30 deadline. Non-compliance may result in regulatory penalties, account suspension, or even criminal liability in some cases.

Crypto Industry’s Response to Stricter KYC Norms

Leading cryptocurrency platforms such as Binance have already begun informing users of the new KYC verification process. The Bharat Web3 Association, a key blockchain advocacy group, welcomed the FIU’s move, calling it a step forward in enhancing user protection and crypto market transparency.

Edul Patel, CEO of crypto investment platform Mudrex, highlighted the need for increased user awareness, not just about KYC compliance but also about tax responsibilities. According to Patel, this dual focus will contribute to a more responsible and regulated crypto ecosystem in India.

India’s Long-Term Vision for Crypto Regulation

Although this new directive marks a critical step, India has yet to unveil a comprehensive legal framework for cryptocurrency. Reports suggest that the Reserve Bank of India (RBI) is preparing a detailed discussion paper that may shape the country’s long-term approach to crypto regulation.

Industry leaders such as Sudhakar Lakshmanaraja view the FIU’s decision as a sign that India is progressing toward a well-defined and sustainable crypto regulatory environment.