India to impose blanket ban on trading 'privacy coins'… citing "money-laundering risk"

India’s government appears to be moving to tighten regulations on so-called “privacy coins,” citing money-laundering risks.

According to IndiaTimes on the 22nd (local time), the Financial Intelligence Unit (FIU), under India’s Ministry of Finance, recently ordered virtual asset (cryptocurrency) exchanges and brokers to halt handling “privacy coins” designed to enhance anonymity.

The FIU is said to have taken the step after determining that these assets make transaction tracing difficult and are therefore highly susceptible to misuse for money laundering. In its guidance, the FIU said, “Reporting entities, including exchanges and intermediaries, must not allow deposits or withdrawals of anonymity-enhanced virtual assets designed to conceal or obscure the origin, ownership, or value of transactions.” It also stressed that such assets should be treated as transactions not permitted under each institution’s risk management framework.

Privacy coins such as Monero (XMR), Zcash (ZEC) and Dash (DASH) use advanced cryptography to hide users’ identities and transaction histories. By generating one-time addresses, these coins make it difficult to identify the actual recipient and, unlike Bitcoin (BTC) or Ethereum (ETH), have been viewed as effectively untraceable.

Indian authorities also warned of potential sanctions, saying illicit funds could flow in through anonymization tools such as virtual-asset “mixers” or “tumblers.”