India’s Financial Intelligence Unit has issued new guidelines tightening know-your-customer requirements for users joining crypto platforms.
Regulated crypto exchanges must now verify users using live selfie images and real-time location checks, according to local reports.
The selfie verification uses software that tracks eye and head movement to prevent AI-generated deepfakes from bypassing checks.
Exchanges are also required to collect geolocation data, IP addresses and account creation timestamps at the time of onboarding.
Platforms must verify linked bank accounts by sending a small test transaction to meet anti-money laundering standards.
Users will be required to submit additional government-issued photo identification and verify both email addresses and mobile numbers.
India’s tax authorities have argued that cryptocurrencies and decentralised platforms weaken tax enforcement and collection.
Officials said anonymous wallets, decentralised exchanges and cross-border transactions complicate crypto taxation.
Under current law, gains from cryptocurrency sales in India are taxed at 30%, with limited deductions and no tax-loss harvesting.