India's financial intelligence agency bans privacy coin trading, crypto platforms face a new regulatory landscape

According to media reports, India’s financial intelligence agency recently ordered domestic cryptocurrency trading platforms to fully suspend trading of privacy tokens. According to the agency’s notice, platforms are not only required to halt new privacy coin transactions but also to prohibit users from depositing and withdrawing related tokens, effectively cutting off the flow of these assets.

Privacy Coins Listed as High-Risk Assets

In this regulatory directive, India’s financial intelligence agency explicitly classifies privacy tokens as “unacceptable assets” under the risk mitigation framework. This means that, from a regulatory perspective, privacy coins have been identified as high-risk assets that must be completely banned. This classification reflects Indian regulators’ concerns that privacy coins may facilitate illegal fund flows.

The core features of privacy tokens are transaction concealment and tracking difficulty, which pose inherent regulatory challenges in combating money laundering, anti-terror financing, and other financial crimes. India’s move aims to eliminate the use of such assets within the legal trading system at the source.

Cryptocurrency Platform Compliance Adjustments

For domestic crypto trading platforms, this regulatory decision requires immediate action. Platforms must delist privacy coins from trading pairs and freeze related user asset flows. This will be a systematic business adjustment that may impact some users’ asset allocations.

This move also reflects Indian financial regulators’ intensified stance on risk management of crypto assets. Against the backdrop of increasing global regulatory tightening on cryptocurrencies, India’s step demonstrates a clear attitude toward privacy coins and may influence regulatory directions in other emerging markets in the future.