The Financial Intelligence Unit (FIU) of India has issued a new directive targeting the transparency of off-exchange digital asset trading. According to reports from June 18, 2026, the regulatory body has formally requested three major domestic cryptocurrency exchanges to submit detailed records regarding over-the-counter (OTC) transactions that exceed a valuation of $5,000. This move signals an intensifying effort by Indian authorities to monitor high-volume private transfers that occur outside of public order books.
New Compliance Standards for OTC Desk Operations
The recent mandate requires trading platforms to provide a comprehensive breakdown of private trades conducted since January 2026. By focusing on the $5,000 threshold, the FIU aims to identify patterns in significant capital movements within the Web3 ecosystem. This regulatory scrutiny is particularly focused on OTC desks, which are often used by institutional investors and high-net-worth individuals to execute large trades without causing immediate price slippage on public markets.
The information requested by the FIU typically includes:
- The identity of the parties involved in the peer-to-peer (P2P) or OTC transfer.
- The specific blockchain wallet addresses used for the transaction.
- The source of funds and the purpose of the high-value trade.
- The exact timestamp and valuation of the assets at the time of execution.
Impact on the Indian Digital Asset Market
This directive follows a broader trend of tightening Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) protocols within the South Asian nation. Industry analysts suggest that the retro-active nature of the request, dating back to the start of the year, indicates a thorough audit of the local liquidity providers. While the identities of the three specific exchanges have not been officially disclosed, the requirement applies to those holding significant market share in the Indian Bitcoin (BTC) and Ethereum (ETH) trading pairs.
The tightening of oversight reflects the government's stance on integrating the crypto sector into the existing financial reporting framework. By lowering the reporting threshold to $5,000, the FIU ensures that even mid-tier institutional movements are captured in their database. This level of transparency is intended to mitigate risks associated with the shadow economy and ensure that digital asset service providers remain compliant with the Prevention of Money Laundering Act (PMLA).
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