India Tightens Crypto KYC Rules With Live Selfies and Location

Live selfie verification becomes mandatory

Under the new rules, users must complete live selfie verification when creating an account. Exchanges must use software that tracks eye movement and head motion. This step aims to block AI-generated images and deepfake attempts.

In addition, platforms must collect a user’s geolocation and IP address at the time of signup. They must also record the exact timestamp of account creation.

These requirements go beyond document uploads. Instead, they push exchanges toward real-time identity confirmation.

Indian FUI And Crypto Over The Years

Bank account checks add another layer

The FIU also requires exchanges to verify user bank accounts for crypto KYC in India. To do this, platforms must send a small test transaction to the user’s bank account.

This step helps link crypto activity to a verified financial identity. As a result, regulators gain clearer visibility into fund flows and ownership.

Users must also submit additional government-issued photo ID. They must verify both their email address and mobile number before an account becomes active.

Tax authorities push for tighter controls

The regulatory shift follows growing pressure from India’s tax authorities. Officials from the Income Tax Department recently met with lawmakers to raise concerns about crypto and decentralized finance.

They argued that anonymous wallets and cross-border transactions make tax enforcement difficult. According to officials, decentralized platforms weaken the ability to track gains and identify taxpayers.

India currently taxes crypto gains at 30 percent. However, users cannot offset losses against gains. Authorities say this structure becomes harder to enforce without stronger identity controls.

Exchanges face higher friction and costs

For exchanges, the new rules mean rapid system upgrades. Platforms now need live liveness detection tools, reliable geolocation checks, and automated bank verification systems.

For users, onboarding becomes more involved. Privacy-focused traders may hesitate to share biometric data and precise location details. At the same time, supporters argue that stronger checks improve security and reduce fraud.

This tradeoff may slow short-term growth. However, regulators appear willing to accept that cost.

India signals a firm regulatory direction starting with KYC

India’s move places it among the strictest crypto jurisdictions globally. While other regions focus on licensing and disclosures, India targets the onboarding process itself.

The message is clear. Crypto can operate in India, but only within tight compliance boundaries.

If exchanges adapt smoothly, the country’s massive population could still drive long-term adoption. For now, though, India has chosen control over convenience.

What To Watch For Next

Readers should watch how Indian exchanges implement the new KYC requirements in the coming weeks. Delays in rolling out live selfie checks or geolocation verification could slow new user onboarding.

It’s also worth tracking whether privacy-conscious users begin shifting away from registered platforms, while more institutional traders start paying closer attention. Finally, if global exchanges begin limiting access for Indian users due to compliance pressure, it could trigger major shifts in trading volumes and user behavior across the market.