India's Financial Intelligence Unit (FIU) has mandated the removal of privacy coins from domestic cryptocurrency exchanges, classifying them as "unacceptable assets." The directive, reported by The Economic Times, requires platforms to halt the trading, deposits, and withdrawals of Anonymity Enhancement Tokens (ACEs). This move is part of a broader risk mitigation strategy to prevent the use of these tokens in illicit activities. The FIU has also highlighted the risks associated with using tools like "tumblers" and "mixers," which can obscure the origin of funds, potentially allowing money from sanctioned or blacklisted addresses to enter the financial system undetected. Additionally, exchanges must collect data on non-custodial wallets and consider imposing limits on transfers to these wallets to enhance traceability and compliance.