India's FIU Orders Selfie and Penny-Drop KYC for Crypto to Curb Terror Financing
India’s Financial Intelligence Unit has instructed crypto exchanges to implement both selfie-based identity verification and the penny-drop bank account verification method when onboarding new users. The measures are presented as part of a broader push to combat money laundering and terrorist financing, placing biometric checks and micro-deposit confirmation at the center of exchange KYC workflows.
The directive could reduce illicit activity by making account spoofing and anonymous funding harder, but it also increases compliance burdens for exchanges and friction for legitimate users. Platforms will need to update verification pipelines and privacy safeguards, and peer-to-peer or noncustodial services may face renewed scrutiny. Market participants and consumers will be watching how quickly exchanges roll out the checks and how regulators balance enforcement with user convenience and data protection.