India’s financial watchdog wants to see the receipts on crypto’s backroom deals.
The Financial Intelligence Unit of India (FIU-IND) has asked at least three major crypto exchanges to hand over records of over-the-counter transactions exceeding $10,000, roughly 9.44 lakh rupees. The directive covers OTC activity dating back to January 2026, and it follows a meeting held at the end of May 2026 between the agency and exchange operators.
Why OTC desks are the target
OTC desks let large buyers and sellers negotiate directly, often through a broker or desk that handles the settlement privately, executing trades at a fixed price insulated from market volatility. High-value OTC trades frequently end with assets being withdrawn to private wallets, not custodial accounts on exchanges, making these transactions much harder for regulators to trace and a natural avenue for money laundering and sanctions evasion.
The agency’s specific focus includes verifying beneficial ownership, particularly when private entities are involved. Shell companies and layered corporate structures can obscure the ultimate beneficial owner, or UBO, making it trivial to move illicit funds through what looks like a legitimate trade.
