TLDR
- India’s FIU has requested records of crypto OTC transactions exceeding $10,000 from major exchanges.
- The directive focuses on beneficial ownership behind private companies, trusts and intermediary trading structures.
- Exchanges must preserve OTC transaction records from January 2026 for regulatory and investigative review.
- Large OTC crypto trades face scrutiny due to wallet withdrawals and cross-border transfer risks.
- Indian OTC desks now face stronger expectations for KYC, record-keeping and transaction reporting controls.
India’s Financial Intelligence Unit has asked three major cryptocurrency exchanges to submit records of over-the-counter crypto transactions valued above $10,000. The request focuses on large private trades that are settled outside public exchange order books. The directive reportedly covers transaction records from January 2026 onward.
The FIU-IND operates under India’s Finance Ministry and monitors suspicious financial activity across regulated reporting entities. Crypto exchanges registered in India are already required to submit suspicious transaction reports when activity appears linked to money laundering risks. The latest request seeks more detailed information on large OTC deals handled by major platforms.
OTC crypto transactions are commonly used by high-net-worth clients, institutions and companies that want to execute large trades without moving market prices. These deals are usually negotiated directly between the client and a platform or intermediary. Regulators are now examining whether such channels provide enough visibility into ownership, funding sources and wallet destinations.
Beneficial Ownership Becomes Central Focus
The FIU’s main area of review is beneficial ownership, especially where private companies, trusts or intermediaries appear in transaction records. Such structures can make it harder to identify the natural persons who ultimately control funds. Exchanges have been asked to collect and preserve information showing who stands behind these entities.
According to the reported directive, the request was issued after a meeting in late May and covers closely held firms and other non-retail participants. An official from a crypto intermediary told the Economic Times that know-your-customer checks can be more difficult for private companies than for individual retail users. The official also said fake identity documents remain a concern for both crypto platforms and banks.
OTC desks may offer negotiated pricing, faster execution and quicker withdrawals to private wallets after a purchase is completed. Once digital assets leave an exchange account, they can move across wallets or borders with fewer controls than traditional banking transfers. That feature has made wallet tracing, customer screening and transaction monitoring central parts of crypto compliance reviews.
Global Reporting Pressure Reaches Indian OTC Desks
India’s request fits into a broader regulatory push to apply stronger reporting standards to digital asset markets. Authorities in several jurisdictions are increasing attention on identity checks, transaction reporting, stablecoin activity and ownership disclosure. The focus has expanded beyond public exchange trading to private channels used for large settlements.
In the United States, lawmakers have advanced digital asset proposals covering payment stablecoins and market oversight responsibilities. The European Union has also moved forward with a common cryptoasset framework through MiCA, while the United Kingdom, Singapore and Australia continue strengthening supervision of crypto intermediaries. These measures reflect a wider effort to align crypto compliance with traditional finance requirements.
For Indian OTC desks, the FIU directive raises expectations around record-keeping, due diligence and customer verification. Exchanges will need to show who controlled the funds, where the money originated and where crypto assets were transferred after execution. The request signals that large off-exchange crypto trades will remain within the scope of financial intelligence monitoring.
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