India Slams BingX, LBank in Massive Crackdown on Offshore Crypto Exchanges

India has launched its most forceful regulatory assault on the cryptocurrency sector to date, blacklisting 25 offshore exchanges, including major players BingX and LBank, which collectively manage over $9 billion in assets. This sweeping move by the Financial Intelligence Unit-India (FIU-IND) underscores a relentless push to enforce anti-money laundering (AML) compliance and signals a stark warning to platforms operating without oversight in one of the world’s largest crypto markets.

• Crackdown Scale: 25 offshore exchanges blacklisted for violating AML standards.
• Main Targets: BingX and LBank hit, with access to apps and websites blocked in India.
• Market Tension: Strict regulations clash with India’s position as a global leader in crypto adoption.
• Global Trend: Move reflects tightening regulatory scrutiny on digital assets worldwide.

Why Offshore Exchanges Are in the Crosshairs

The FIU-IND, operating under India’s 2002 anti-money laundering law, has zeroed in on these 25 platforms for failing to meet critical AML and know-your-customer (KYC) requirements. As of October 2, these exchanges have been ordered to disable access to their apps and websites for Indian users. The sheer volume of activity affected is jaw-dropping. Data from CoinMarketCap shows that 14 of the targeted platforms recorded $22 billion USD in trading volume in just 24 hours. This isn’t a minor reprimand—it’s a full-on blockade aimed at curbing potential illicit financial flows.

For those unfamiliar, AML regulations are designed to prevent money laundering and terrorist financing by ensuring financial entities track and report suspicious activities. KYC protocols, a key part of AML, require platforms to verify user identities, often through government-issued IDs and address proofs. Since March 2023, crypto service providers in India have been subject to these rules, mandating registration with FIU-IND and regular activity reporting. Many offshore exchanges—platforms based outside India but catering to Indian users—have either dodged these obligations or found compliance too burdensome, landing them on this blacklist.

BingX and LBank aren’t the first to face India’s regulatory hammer. Between 2023 and 2024, big names like Binance, Coinbase, KuCoin, and OKX were similarly targeted. Some bent the knee—Bybit, for instance, paid a $1.06 million USD fine to resume operations—while others, like OKX, simply pulled out of the Indian market. Over 50 exchanges are now registered with FIU-IND, proving compliance is doable. Yet, for the latest batch of 25, including BingX and LBank, the message is crystal clear: play by the rules or get shut out.

India’s Love-Hate Relationship with Crypto

India’s regulatory stance on crypto is a messy tug-of-war between caution and control. The Reserve Bank of India (RBI), the nation’s central bank, has been ringing alarm bells about systemic risks from digital assets for years. In 2018, the RBI tried to outright ban crypto transactions, a decision struck down by the Supreme Court in 2020. Rather than drafting comprehensive crypto legislation since then, the government has leaned on a patchwork of punitive measures. A brutal 30% tax on crypto profits, paired with a 1% tax deducted at source (TDS)—a levy collected upfront on every transaction before profits are even calculated—has gutted trading volumes. Many Indian traders, feeling squeezed, have either gone underground or turned to offshore platforms, ironically fueling the very crackdowns we’re seeing now.

Picture this: a young trader in Mumbai, dabbling in Bitcoin to hedge against inflation, wakes up to find their go-to exchange blocked overnight. Frustration is an understatement. Would you keep trading under a 30% tax burden, or hunt for loopholes on unregistered platforms? This is the daily reality for many in India’s crypto community, caught between innovation and a government that seems more focused on containment than encouragement.

Despite Crackdowns, Adoption Soars

Here’s the paradox: even with these draconian measures, India remains the undisputed heavyweight in global crypto adoption. Indians hold an estimated $4.5 billion USD in digital assets, and the country has topped blockchain analytics firm Chainalysis’ global adoption index for three consecutive years. Between June 2024 and June 2025, India’s on-chain activity—transactions recorded directly on blockchain networks, bypassing centralized exchanges—surged by a staggering 69% year-over-year. This isn’t just a statistic; it’s a testament to grassroots enthusiasm, driven by remittances, fintech integrations, and a tech-hungry youth demographic seeking alternatives to traditional finance.

In the broader Asia-Pacific (APAC) region, crypto transaction volumes skyrocketed from $1.4 trillion to $2.36 trillion USD in the same period, with India as a major contributor. But this growth hides a darker side. Heavy-handed regulations are pushing some users toward riskier avenues like peer-to-peer (P2P) trading or unregulated decentralized platforms, where scams and fraud often lurk. While the numbers scream success, the underbelly of this adoption boom shows not everyone is playing safe.

Japan vs. India: Two Paths for Crypto in Asia

Contrast India’s approach with Japan, another APAC giant, and the difference is night and day. Japan saw a mind-blowing 120% year-on-year growth in crypto activity by June 2025, largely thanks to progressive regulatory reforms that embrace innovation while maintaining oversight. Exchanges in Japan operate under clear guidelines, taxes are reasonable, and the government actively supports blockchain development. Meanwhile, India’s strategy of sky-high taxes, TDS, and blacklisting risks shooting itself in the foot with regulatory overkill.

India leads in adoption, sure, but at what cost? Japan’s model suggests a balanced path can fuel growth without sacrificing stability. If India keeps swinging the banhammer, it might forfeit its edge to nations that see crypto not as a threat, but as an opportunity. Could India’s 69% on-chain surge signal a distrust in centralized exchanges post-crackdowns, or is it pure organic demand? Either way, without a shift in policy, the country risks alienating the very innovators driving its dominance.

Future Regulatory Heat: CARF and Beyond

Looking ahead, India’s grip on crypto is set to tighten further. The government plans to adopt the OECD’s Crypto Asset Reporting Framework (CARF) by April 2027, a global standard designed to track crypto transactions across borders for tax purposes. A top finance ministry official has confirmed India will sign the Multilateral Competent Authority Agreement (MCAA) next year to enable automatic exchange of tax information on digital assets. What’s especially chilling is the retrospective nature of this framework—undeclared gains from past trades could come under scrutiny, turning old wallet transactions into a retroactive tax nightmare.

For the uninitiated, CARF is akin to a global tax net, requiring crypto platforms and wallets to report user transactions to tax authorities, which then share data internationally. MCAA provides the legal backbone for this data swap. Practically, this means Indian crypto holders might need to dig up records of every trade or transfer, even from years ago. Non-compliance could trigger penalties or audits. If you’re an Indian user, start keeping meticulous records now—every Satoshi matters. Looks like Big Brother isn’t just watching; it’s taking notes on every coin you’ve ever moved.

This isn’t just a future concern; it’s a seismic shift in how crypto wealth will be monitored. Will users be forced to declare transactions from anonymous wallets? How far back will audits reach? The uncertainty alone could spook casual traders, pushing them out of the market or deeper into the shadows. For a country championing adoption, this level of scrutiny feels like a betrayal of decentralization’s core promise.

Counterpoints: Necessary Evil or Innovation Killer?

Let’s play devil’s advocate. On one hand, India’s crackdown on offshore exchanges could be a bitter but necessary pill. Money laundering and scams are real threats—centralized platforms, often peddling dubious altcoins, have burned countless users. By weeding out non-compliant players, India might indirectly bolster Bitcoin’s case as the ultimate decentralized, censorship-resistant asset. Bitcoin maximalists might even cheer this as a purge of the scam-ridden undergrowth, reinforcing BTC as the gold standard while altcoin casinos crumble under regulatory weight.

On the flip side, this overreach could strangle the grassroots adoption that makes India a leader. Heavy taxes and looming audits clash with the ethos of effective accelerationism—the idea that tech like blockchain should be pushed forward aggressively to disrupt outdated systems. If traders can’t afford to participate legally, or fear retroactive penalties, they’ll either quit or go full black-market. And what of Ethereum and other innovative protocols? India’s fintech scene thrives on DeFi and smart contracts—stifling these under broad regulatory strokes could kill niches Bitcoin itself doesn’t fill. Freedom and privacy, core to crypto’s DNA, take a backseat when every transaction is a potential tax trap.

Key Takeaways and Questions on India’s Crypto Crackdown

• What triggered India’s blacklist of offshore exchanges like BingX and LBank?
  Non-compliance with anti-money laundering (AML) standards under the 2002 law prompted FIU-IND to blacklist 25 platforms, aiming to halt illicit financial activities.
• Why hasn’t India established clear crypto legislation?
  The Reserve Bank of India’s worries about systemic risks have stalled full laws, leading to reliance on harsh taxes and partial oversight instead.
• How have India’s crypto taxes impacted trading?
  A 30% tax on profits and 1% TDS on transactions have drastically cut trading volumes, driving some activity to unregulated or offshore platforms.
• How does India maintain global leadership in crypto adoption despite restrictions?
  A 69% year-over-year surge in on-chain activity, fueled by grassroots demand, remittances, and fintech, keeps India atop Chainalysis’ adoption rankings.
• What regulatory challenges loom for Indian crypto users?
  Adoption of the OECD’s CARF by 2027 will enable cross-border tax reporting, with retrospective checks on past gains, heightening scrutiny and compliance burdens.
• Could India’s strict policies undermine its crypto potential compared to Japan?
  Yes—Japan’s 120% growth via progressive reforms highlights how India’s punitive approach might alienate innovators, risking its edge despite massive adoption.
• Do these crackdowns indirectly strengthen Bitcoin’s position?
  Potentially—by targeting centralized, often scam-heavy exchanges, regulation could push users toward Bitcoin’s trustless model, though it risks crushing altcoin-driven innovation.

A Crossroads for India’s Crypto Future

India stands as both a beacon and a battleground in the crypto world. It’s the champion of adoption, with on-chain activity and transaction volumes unmatched globally, yet its regulatory playbook feels like a manual on how to scare off your own talent. The crackdown on BingX, LBank, and others is a double-edged sword—scammers and money launderers have no place if we want mainstream trust, but the cost of overregulation is steep. As taxes bite and audits loom, Indian crypto users navigate a minefield of compliance and costs, holding out for a day when decentralization isn’t just a buzzword but a lived reality.

As the screws tighten, will Bitcoin’s unshakeable ethos become its ultimate shield against centralized overreach, or will innovation bleed out under regulatory weight? Time will tell if India can balance control with the freedom that fuels this financial revolution—or if it’s too busy policing to notice the opportunity slipping through its fingers.