India Tightens Crypto KYC As Nigeria Links Trades To Tax IDs
- India FIU tightens crypto KYC with live selfie checks plus geo, time, and IP logs.
- Rules ban ICOs and block mixers/tumblers to strengthen transaction traceability now.
- Nigeria NTAA 2025 links crypto trades to tax IDs (TIN/NIN) through VASP reporting.
India and Nigeria have rolled out stricter compliance rules for the crypto sector. India’s Financial Intelligence Unit has ordered deeper identity verification for exchanges to counter money laundering and terror financing risks. Nigeria has launched a tax-driven oversight model that links digital asset transactions to taxpayer identity records under a nationwide reform.
India’s Financial Intelligence Unit updated its crypto compliance rules on Jan. 8, according to Press Trust of India. The new guidance requires exchanges to verify users using a live selfie. Users must blink during the selfie check to prove the person is real. The FIU also demands stronger traceability data during onboarding.
FIU Orders Geo-Tracking, Extra ID Documents, and Bank Ownership Checks
Under the updated framework, exchanges must log a user’s geographic coordinates. Platforms must also record the date and time of verification. The FIU requires collection of the IP address used during onboarding. This data package is meant to strengthen audit trails. It also aims to reduce fraud linked to stolen identities or synthetic accounts.
India already requires the Permanent Account Number for crypto access. The FIU now demands additional documents beyond PAN. Exchanges must collect a passport, driver’s license, Aadhaar card, or voter ID. Platforms must also gather mobile numbers and email addresses.
The FIU has also tightened banking confirmation steps. Exchanges must authenticate bank ownership through the penny-drop method. This involves sending a refundable 1 rupee charge to confirm the account. The step confirms the bank details match the customer record.
Higher-risk clients face stricter monitoring under the rules. Enhanced due diligence is required for users linked to tax havens. It also applies to FATF-linked jurisdictions and politically exposed persons. Some non-profit organizations also fall into the high-risk screening bucket.
India Bans ICOs and Mixers as Nigeria Links Crypto Trades to Tax IDs
India’s FIU rules also restrict certain crypto-related products. Exchanges cannot support initial coin offerings or initial token offerings. The guidelines state these offerings lack a justified economic rationale. They are described as carrying heightened and complex risks of money laundering and terrorist financing.
Related: Coinbase Reopens in India as Asia Crypto Demand Increases
Privacy tools are also directly targeted by India’s updated framework. Exchanges are barred from using or enabling tumblers and mixers. These tools can hide transaction trails and weaken traceability. The FIU aims to block systems designed to make crypto flows untraceable.
All platforms must register with the FIU to operate within compliance rules. Exchanges must report suspicious trades and transactions. They must keep user data for five years as required by the guidelines. The structure places crypto platforms under reporting duties similar to other regulated financial entities.
India remains a bit wary on crypto, even though it is allowed to be traded in regulated form. The nation categorizes crypto as virtual digital assets under the Income Tax Act, 1961. VDAs can be traded by citizens on FIU-approved platforms. But crypto is not legal tender.
Nigeria is taking a different compliance route focused on tax reporting. The country is rolling out crypto oversight through identity systems rather than blockchain surveillance. Under Nigeria’s new tax reforms, crypto service providers must link transactions to Tax Identification Numbers.
The framework took effect on Jan. 1 under the Nigeria Tax Administration Act 2025. It requires virtual asset service providers to submit regular returns to tax authorities. Reports must include the nature and value of the transactions facilitated. They must also include customer identity details, such as names and contact information. Tax IDs are mandatory in reporting, with NIN required where identity laws apply.
The legislation permits tax authorities to ask crypto providers for additional information. It also relies on keeping customer and transaction data for the long term. VASPs are required to exchange transaction information with tax authorities and FIUs. This also stretches AML reporting requirements into a tax control point.
