Indian crypto startups are preparing for a major shift in regulatory compliance as new KYC mandates take effect. The updated rules require platforms to implement stricter know your customer procedures including live selfie verification, government issued ID checks, and geo tagging of users. Banks linked to crypto accounts must also be verified through micro transactions while high risk clients face enhanced due diligence. Startups are now required to maintain detailed records of customer information and transactions for several years and report suspicious activity promptly. The changes are designed to align Indian crypto practices with international standards and prevent money laundering and other illicit activities. While the new rules offer clarity and could boost investor confidence in the long term, they also pose operational challenges and higher costs for smaller startups. Some platforms may face slower user onboarding and increased barriers to entry. Despite the challenges, these regulations mark an important step in formalizing the crypto sector in India and establishing a more secure and transparent environment for both users and businesses.
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