India Mandates Strict KYC for Crypto: Selfie, Penny Drop, Liveness Detection Now Required

• India's financial intelligence agency, FIU, has mandated new anti-money laundering (AML) and counter-terrorist financing (CFT) KYC protocols for cryptocurrency exchanges.
• New requirements include a selfie with liveness detection, recording of geographical coordinates, and 'penny-drop' bank account verification for user onboarding.
• The directives discourage Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs) and prohibit transactions linked to tumblers, mixers, and anonymity-enhancing tokens.
• All crypto exchanges must register with the FIU, submit suspicious transaction reports, and maintain client records to combat financial risks.
• Exchanges must update KYC for high-risk clients every six months and annually for others, with enhanced due diligence for PEPs, NPOs, and those linked to tax havens.

Why It Matters: India enforces stringent KYC for crypto, requiring selfies, liveness detection, and bank verification to combat illicit financing.