India's Financial Intelligence Unit (FIU-IND), under the Ministry of Finance, has issued a directive ordering cryptocurrency exchanges and platforms in the country to delist and restrict transactions involving Anonymous-Enhancing Coins (ACE). The FIU has classified these privacy-focused tokens as "unacceptable assets" under its risk mitigation framework, instructing platforms to halt deposits, withdrawals, and trading for such assets.
The move is a significant step in India's efforts to combat money laundering and terrorist financing. Authorities specifically highlighted the use of mixing services like "tumblers" and "mixers," emphasizing that these tools make it difficult to trace funds from sanctioned addresses and allow illicit funds to infiltrate the financial system.
Under the new regulations, crypto platforms will be required to collect more data on transactions linked to non-custodial wallets, and specific transfer limits to such wallets are planned. The overall aim is to increase transaction traceability and prevent illicit fund movements.
Industry participants report that privacy cryptocurrencies such as Monero (XMR), Zcash (ZEC), and Dash (DASH) are directly affected by these restrictions. Regulators argue that the cryptographic features of these tokens—like stealth addresses and transaction obfuscation—pose significant challenges for anti-money laundering (AML) compliance.
This decision aligns with a growing global regulatory trend. Similar restrictions on privacy coins have been implemented previously in various European and Asian countries. Kishan Balaji, a consultant associated with the XDC Network, commented that "blockchain networks have to be designed and used in compliance with the laws of the land," adding that a clear regulatory decision brings more certainty to India's financial ecosystem.
