Crypto investors face stricker regulations: new rules make opening accounts more challenging

New Delhi (The Uttam Hindu): If you invest in cryptocurrencies or are planning to open an account in the future, this news is important for you. The rapidly growing influence of digital assets has led to a surge in investors, but activities such as money laundering, terrorist funding, and illegal transactions have raised government concerns. In response, the central government has implemented new security and identification regulations on crypto exchanges.

Opening a crypto account is no longer easy

The Financial Intelligence Unit (FIU), under the Ministry of Finance, has issued anti-money laundering (AML) and KYC guidelines for crypto exchanges. Under these rules, issued on January 8th, simply uploading documents will no longer be sufficient. Users will have to complete several additional verification steps to open an account.

Live selfies and geo-tagging are mandatory

According to the new rules, users will be required to provide a live selfie when creating an account. This will be done through gestures like head movements or blinking to ensure that the person is real and not a photo or deepfake. Geo-tagging will also be mandatory, which will record the user's location, date, time, and IP address. This is intended to prevent fake identities and suspicious activities.

Strengthening identity and bank verification:

In addition to a PAN card, one of the following identification documents, such as a passport, Aadhaar, or voter ID, will now be required to open an account. OTP verification of email and mobile number will also be mandatory. A penny-drop process has also been implemented, requiring a one rupee transaction to verify the bank account.

The government stated that misuse of digital assets could lead to serious incidents such as money laundering and terrorist financing. The new regulations aim to ensure the crypto ecosystem is secure, transparent, and trustworthy.