India brought Virtual Digital Asset Service Providers (VDA SPs) within its anti-money laundering framework in March 2023, when Notification S.O. 1072(E) designated them as Reporting Entities under the Prevention of Money-Laundering Act, 2002 (PMLA) [1]. Travel Rule obligations are currently set out in the AML & CFT Guidelines for Reporting Entities Providing Services Related to Virtual Digital Assets (Updated as on 08.01.2026) (the "Guidelines"), issued by the Financial Intelligence Unit-India (FIU-IND) [2]. The Guidelines require originator and beneficiary information to be transmitted for every VDA transfer between Reporting Entities, without providing for any de minimis threshold, and expressly prohibit post-facto submission of the required information. [3][4]

Timeline: Implementation of the Crypto Travel Rule in India

• March 7, 2023: Notification S.O. 1072(E) designates VDA SPs engaged in notified activities as Reporting Entities under the PMLA. [1]
• March 10, 2023: FIU-IND issues the original AML & CFT Guidelines for VDA Reporting Entities, including Travel Rule obligations. [5]
• November 9, 2023: Notification S.O. 4877(E) notifies the Director, FIU-IND as the regulator of VDA SPs under the PMLA. [6]
• January 8, 2026: FIU-IND publishes the updated AML & CFT Guidelines, which restate and expand the Travel Rule requirements applicable to VDA transfers. [7]

Overview

1. Is cryptocurrency legal in India?

Yes. It is legal to own and trade cryptocurrencies in India, although they are not recognized as legal tender. Virtual Digital Assets (VDAs) are defined in the Income-tax Act, 1961, which covers cryptographically generated tokens providing a digital representation of value, non-fungible tokens, and any other digital asset notified by the Central Government [8]. The Digital Rupee (e₹), the Central Bank Digital Currency issued by the Reserve Bank of India, is excluded from the scope of the VDA framework as it represents a digital form of sovereign fiat currency. [9]

2. Are there AML crypto regulations in India?

Yes. The Prevention of Money-Laundering Act, 2002 (PMLA) and the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (PMLR) constitute the foundation of India's AML framework [10]. Through Notification S.O. 1072(E) dated March 7, 2023, the Government of India designated VDA SPs as Reporting Entities when they carry out any of the following activities on behalf of another person in the course of business [1]:

• Exchange between virtual digital assets and fiat currencies;
• Exchange between one or more forms of virtual digital assets;
• Transfer of virtual digital assets;
• Safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; and
• Participation in and provision of financial services related to an issuer's offer or sale of a virtual digital asset.

These obligations are consolidated in the AML & CFT Guidelines for Reporting Entities Providing Services Related to Virtual Digital Assets, updated as on January 8, 2026 [11]. Notably, the obligations are activity-based and apply irrespective of the entity's physical presence in India. [9]

3. Is the Crypto Travel Rule mandated in India?

Yes. The Guidelines set out Travel Rule obligations for Reporting Entities, grounded in the PMLR requirement that all necessary information be maintained to permit reconstruction of individual transactions [12]. Reporting Entities must include required and accurate originator information, and required beneficiary information, on VDA transfers and related messages, and must monitor transfers to detect those which lack the required information. [13]

4. Who regulates cryptocurrency in India?

The Financial Intelligence Unit-India (FIU-IND), operating under the Department of Revenue in the Ministry of Finance, is the AML/CFT/CPF regulator for VDA SPs [14]. The Director, FIU-IND was notified as the regulator of VDA SPs through Notification S.O. 4877(E) dated November 9, 2023, appointed under the PMLA. [6]

FATF Travel Rule requirements in India

1. Are there licensing or registration requirements for VASPs in India?

Yes. Registration with FIU-IND is a mandatory pre-requisite for VDA SPs engaged in any notified activity, and non-registration is deemed a violation of the PMLA that may invite enforcement action [15]. The registration requirement applies to all entities engaged in notified activities, irrespective of their registered location or physical presence in India. [9]

2. When does the Crypto Travel Rule go into effect in India?

Travel Rule obligations have applied to Indian VDA SPs since FIU-IND issued its original AML & CFT guidelines on March 10, 2023 [5], following the designation of VDA SPs as Reporting Entities on March 7, 2023 [1]. The requirements currently in force are those of the updated Guidelines, published as on January 8, 2026. [7]

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Complying with the FATF Crypto Travel Rule in India

1. What is the minimum threshold for the Crypto Travel Rule in India?

No threshold applies. The Guidelines require the full scope of originator and beneficiary information to be transmitted for every VDA transfer between Reporting Entities, and do not provide for any de minimis threshold below which the requirements would not apply. [3][13]

2. What personally identifiable information is required to be shared for the Crypto Travel Rule in India?

The originating Reporting Entity must obtain, hold and transmit the following information, and the beneficiary Reporting Entity must obtain it from the originating Reporting Entity and hold it [3][16]:

The originator's physical (geographical) address must be transmitted provided that the address has been verified for accuracy by the originating Reporting Entity as part of its CDD process [3]. The beneficiary's name is not required to be verified by the originating Reporting Entity for accuracy, but should be reviewed for the purposes of sanctions screening, transaction monitoring and STR filing [3]. The beneficiary Reporting Entity, in turn, must verify the beneficiary's name for accuracy and confirm that the name and account number received from the originating Reporting Entity match its own verified client data. [16]

Several operational requirements accompany the data requirements:

• The required information must be submitted immediately — prior to, simultaneously or concurrently with the transfer itself — and securely, and must be made available on request to appropriate authorities without delay. [17]
• Post-facto submission of the required information is not permitted: submission must occur before or when the VDA transfer is conducted. [4]
• Before transmitting the required information, the originating Reporting Entity must undertake sanctions screening on the counterparty to avoid dealing with illicit actors or sanctioned persons or entities unknowingly. [12]
• Reporting Entities must deploy an appropriate technological solution enabling them to obtain, hold and transmit the required information; in exceptional cases where deployment is found not feasible, a self-declaration based mechanism may be used. [17]

3. Are there differences in customer PII requirements for cross-border transfers versus transfers within India?

No. The Guidelines set out a single set of Travel Rule requirements for VDA transfers and do not distinguish between domestic and cross-border transfers [2]. The underlying obligations are activity-based and apply to all entities engaged in notified activities, irrespective of their registered location or physical presence in India. [9]

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4. What are the non-custodial or self-hosted wallet requirements in India?

India regulates transfers involving self-hosted (unhosted) wallets through a risk-based approach. Where a VDA transfer takes place between two wallets and at least one of them is hosted, the onus of compliance falls on the Reporting Entity where the wallet is hosted, which must obtain the required originator, beneficiary and other relevant information from its client. [18]

Because transfers to or from unhosted wallets and related P2P transactions are deemed to pose significant risks due to anonymity and the lack of limits on portability, mobility, transaction speed and usability, Reporting Entities must collect data on unhosted wallet transfers, monitor and assess that information to determine the risk posed, and apply appropriate enhanced measures under CDD and other risk-based controls [19]. Reporting Entities may also choose to impose additional limitations, controls, or prohibitions on transactions with unhosted wallets in line with their risk assessment, including enabling only those transactions assessed to be reliable. [20]

5. Are there restrictions on anonymity-enhancing crypto tokens, mixers, or tumblers in India?

Yes. Transactions involving Anonymity-Enhancing Crypto Tokens (AECs) are deemed unacceptably high risk, and Reporting Entities must refrain from permitting deposits or withdrawals of AECs or VDAs designed to conceal or obfuscate the origin, ownership, or value of transactions [21]. The same reasoning applies to transactions involving crypto tumblers, mixers, and other anonymity-enhancing products or services: Reporting Entities must deploy appropriate monitoring and analytical tools to identify such transactions, and upon detection these transactions must not be facilitated and must trigger suitable risk mitigation measures. [22]

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Why choose Notabene for Crypto Travel Rule Compliance in India?

Indian VDA SPs subject to FIU-IND's Travel Rule under the updated AML & CFT Guidelines can use Notabene's Transact to meet their obligations in full. Transact automates the transmission of originator and beneficiary information before the transfer, applies jurisdiction-specific risk policies through a configurable Rules Engine, including India's no-threshold rule and pre-transmission counterparty due diligence and sanctions screening, and supports the identification of self-hosted wallets in line with the Guidelines' risk-based controls for unhosted wallet transfers. With an active network of over 2,000 regulated entities, Notabene gives Indian VDA SPs the global counterparty reach they need to send and receive compliant Travel Rule data across borders.

Speak with our Travel Rule compliance experts to learn more about how Notabene can help you achieve your business's unique Travel Rule compliance needs in India.

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