The Indian cryptocurrency market is coming under increased scrutiny as authorities try to regulate more significant over-the-counter (OTC) transactions. The Financial Intelligence Unit (FIU) of India has mandated that three significant cryptocurrency exchanges provide thorough records of over-the-counter (OTC) transactions over $10,000. This is a significant shift in how authorities monitor transactions involving private digital assets. The endeavour focuses on transaction visibility gaps and attempts to pinpoint the real individuals in command of organisations engaged in high-value bitcoin transactions.

• FIU Orders Exchanges to Report OTC Crypto Deals Above $10,000
• Regulators Want Ultimate Beneficial Owners Identified
• Record-Keeping Rules to Apply From January 2026
• India Targets Transparency Gaps in Private Crypto Markets

FIU Orders Exchanges to Report OTC Crypto Deals Above $10,000

The Financial Intelligence Unit of India requested information on over-the-counter transactions exceeding $10,000 from three of the nation's top cryptocurrency exchanges. The request applies to transactions that occur outside conventional exchange order books, where buyers and sellers engage in direct negotiations or work through intermediaries.

OTC transactions frequently occur discreetly, which makes it challenging for regulators to monitor the flow of money and ownership structures, in contrast to spot market deals that are openly reflected on exchange platforms. The FIU is requesting transaction-level details from exchanges in an effort to gain more insight into a portion of the cryptocurrency sector that has mostly escaped regular monitoring systems.

Only completed trades are subject to the reporting obligation. To guarantee that information related to high-value OTC activity is still available for regulatory examination, exchanges are required to keep thorough records and supply pertinent information when asked by authorities.

Regulators Want Ultimate Beneficial Owners Identified

Determining the ultimate beneficial owners of entities involved in over-the-counter cryptocurrency transactions is a primary emphasis of the FIU's instruction. The names of registered businesses or intermediaries listed on transaction documents are not the only information that regulators are looking for.

The watchdog wants exchanges to pinpoint the real people who eventually own, manage, or profit from assets that are transferred through brokers, investment vehicles, private businesses, and other organisations engaged in over-the-counter transactions. The purpose of this regulation is to stop players from hiding the genuine ownership of digital assets through representatives or layered company structures.

Finding beneficial owners, according to authorities, might assist in addressing gaps that would let big transactions to be carried out with insufficient transparency. Stronger customer due diligence protocols are needed when working with institutional clients and corporate entities, and exchanges that facilitate over-the-counter services are subject to increased regulatory obligations as a result of the increased scrutiny.

Record-Keeping Rules to Apply From January 2026

From January 2026 onward, the FIU has directed exchanges to track down and keep documents about eligible OTC transactions. This establishes a clear foundation for preserving previous data that regulators might look at in upcoming inquiries or compliance evaluations.

Exchanges are required under the retention requirement to maintain information about counterparties, ownership structures, intermediaries, and supporting paperwork used during onboarding and verification procedures in relation to transactions that exceed the USD 10,000 threshold.

By retaining these documents from the start of 2026, regulators will be able to create an audit trail for significant private cryptocurrency transactions and look at transaction histories over time. Additionally, it lessens the chance that crucial data would be misplaced or destroyed before authorities want to access it.

India Targets Transparency Gaps in Private Crypto Markets

The FIU's most recent action draws attention to issues with OTC cryptocurrency trading's lack of transparency. Regulators have no insight into how assets are transferred, who controls them, and whether intermediaries are working on behalf of unidentified parties, as many transactions take place outside the public order books.

Authorities are making an effort to directly address these blind spots by gathering information on transactions above $10,000 and requiring the identification of beneficial owners. The project suggests that high-value cryptocurrency trades that avoid traditional trading venues are under more scrutiny from regulators.

Authorities are trying to directly address these blind spots by gathering information on deals above USD 10,000 and requiring the identification of beneficial owners. The project suggests that high-value cryptocurrency transactions that avoid traditional trading venues are being closely monitored by regulators.

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