India Tightens Crypto KYC Norms With Live Selfies And Geo-Tagging |

Updated: January 13, 2026 02:01

Image Source : Asia Insurance Post

India’s Financial Intelligence Unit (FIU) has introduced stricter Know Your Customer (KYC) and Anti-Money Laundering (AML) rules for cryptocurrency exchanges. Users must now provide live selfies, geo-location details, PAN, and bank verification. While the move enhances transparency and curbs illicit activity, it raises compliance costs and privacy concerns.

India’s crypto sector is facing a new wave of regulatory tightening as the FIU announced enhanced KYC and AML measures effective January 8, 2026. The updated framework classifies exchanges as Virtual Digital Asset (VDA) service providers, requiring them to adopt advanced verification methods to prevent money laundering, terror financing, and fraudulent activities.

Key highlights from the announcement include

Users must submit live selfies with liveness detection, ensuring real-time identity verification.
Exchanges are mandated to capture geo-location data, including latitude, longitude, IP address, and timestamp during account creation.
PAN submission is compulsory, along with an additional identity document such as Aadhaar, Passport, or Voter ID.
Bank accounts must be verified using the “penny-drop” method, involving a Re 1 transaction.
Email and mobile verification are mandatory for all users.
The FIU aims to align India’s crypto regulations with global AML standards.
Exchanges face higher compliance costs, which may impact smaller platforms.
Privacy concerns have been raised over mandatory geo-tagging and biometric verification.

The benefits of these measures include stronger safeguards against illicit transactions, improved investor protection, and enhanced credibility for India’s crypto ecosystem. By tightening compliance, regulators hope to attract institutional participation and build trust in digital assets.

However, risks remain. Increased compliance costs could burden smaller exchanges, potentially leading to consolidation in the industry. Privacy advocates warn that mandatory geo-tagging and biometric checks may expose users to surveillance risks. For retail investors, onboarding may become more complex, potentially discouraging new entrants.

Despite challenges, India’s move reflects a global trend of stricter oversight in the crypto sector. With digital assets gaining mainstream traction, regulators are prioritizing transparency and accountability to balance innovation with security.

Sources: Economic Times, Kashmir Reader, Mathrubhumi, Insights on India, Invezz

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