India FIU seeks crypto OTC records above $10,000 from major exchanges

India’s Financial Intelligence Unit has asked at least three major crypto exchanges to share data on over-the-counter crypto transactions above $10,000, according to The Economic Times.

The request followed a meeting in late May and covers records that exchanges must trace and preserve from January 2026 onward.

The directive focuses on large private trades that do not pass through public exchange order books. These OTC deals often help large buyers avoid sharp price moves, but they can also make ownership checks harder when private companies, intermediaries or closely held entities sit between the platform and the real source of funds.

Beneficial ownership drives the request

“OTC players are primarily private companies where the KYC procedure can be a greater challenge compared to retail investors,” an official at a crypto intermediary told The Economic Times.

The comment points to the main issue behind the FIU request. When a buyer is a private company, trust or intermediary, exchanges must verify directors, controllers and ultimate beneficial owners. That process can take more work than checking a retail user’s identity, especially when false documents or mule accounts enter the chain.

OTC clients can also seek faster withdrawals to private wallets after a deal closes. Once coins leave an exchange wallet, a platform has less control over where they move next. That makes wallet ownership, source of funds and post-trade movement central parts of any review.

India tightens crypto compliance checks

The latest request builds on India’s wider push to bring crypto platforms under anti-money laundering rules. As previously reported by crypto.news, India’s FIU issued new guidance in January that required tougher KYC checks for crypto users, including live selfie checks, geolocation and IP tracking during onboarding.

The guidance also required exchanges to update customer records every six or 12 months based on risk. That move focused on user onboarding and account monitoring. The OTC request now shifts attention to large off-exchange transactions and the entities behind them.

India has already used enforcement to push crypto firms toward registration and reporting. crypto.news earlier reported that Binance paid a $2.25 million penalty in India for AML-related violations. The country has also issued notices to offshore virtual digital asset service providers that serve Indian users without FIU registration.

OTC desks face more record pressure

The Finance Ministry has said virtual digital asset service providers fall under India’s Prevention of Money Laundering framework. That framework requires reporting entities to keep records, file suspicious transaction reports and comply with FIU-IND obligations when they serve Indian users.

For exchanges, the latest directive means OTC desks may need stronger checks before and after settlement. They may need to collect more documents on beneficial owners, transaction purpose, source of funds and destination wallets.

For large clients, the process may become slower and more document-heavy. Private companies and intermediaries may face more questions before they can complete large crypto purchases or move funds to external wallets.

The request also shows that regulators are no longer focused only on visible exchange trading. India’s FIU is now looking more closely at private crypto channels where large transactions can move outside public order books but still touch regulated platforms.