India steps up scrutiny of large crypto OTC trades for money laundering

India's Financial Intelligence Unit (FIU-IND) is investigating large-scale transactions conducted through the over-the-counter (OTC) desks of cryptocurrency exchanges, local media outlet the Economic Times reported. According to the report, OTC trading is frequently used by unlisted corporations because the structure—where a platform buys coins with its own funds before finding a counterparty—makes it difficult to trace ultimate beneficial owners (UBOs). The risk is compounded as large clients often prefer to move purchased coins to private, external wallets, from which the assets can be transferred anywhere globally, complicating tracking efforts. Verifying the management and UBOs of these private entities is more complex than for individual customers. A government official noted that exchanges have been required to preserve OTC trading records since January. The FIU can request this data if Suspicious Transaction Reports (STRs) are deemed insufficient or if law enforcement agencies require additional information for an investigation.