Excerpt from Gadgets360 Article, Published on 17 Sep 2025
In light of a surge in high-profile cybercrime, the Indian government has mandated all crypto exchanges, custodians, and intermediaries to conduct comprehensive cybersecurity audits. This directive, issued by the Financial Intelligence Unit (FIU-IND), requires all virtual digital asset (VDA) service providers to engage auditors accredited by the Indian Computer Emergency Response Team (CERT-In), which operates under the Ministry of Electronics and Information Technology. The goal is to boost oversight, reinforce investor trust, and bring Indian crypto operations up to global best-practice standards.
The new rule makes cybersecurity audits a prerequisite for any VDA firm seeking initial or continued registration with the FIU-IND, which supervises compliance with the Prevention of Money Laundering Act, 2002 (PMLA). Web3 entities dealing in VDAs have been subject to PMLA requirements since 2023, placing them on par with banks in terms of anti-money laundering obligations. Presently, around 55 registered firms are active in India’s crypto market.
Industry leaders and experts have welcomed the FIU-IND’s directive as a much-needed trust-building measure. Avinash Shekhar, CEO of Pi42, described mandatory CERT-In audits as a key step for an industry built on trust, aligning Indian platforms with global benchmarks. Edul Patel, CEO of Mudrex, emphasized that the move would safeguard investors and foster a safer industry environment. Recent cyberattacks—including significant breaches at Indian exchanges in 2024 and 2025—have highlighted vulnerabilities and driven the urgency for tougher controls.
Experts note that in addition to safeguarding user assets, the audits should also help investigative agencies trace illicit funds, given that nearly 20-25% of all cybercrimes in India now involve cryptocurrency-related activities. The FIU-IND retains authority to deny or revoke registrations of any VDA firms found violating PMLA compliance, ensuring only responsible actors can operate in the sector.
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