IFSCA Revokes First Broker-Dealer License in GIFT City Amid Ongoing Crackdown on Non-Compliant Intermediaries

IFSCA Takes Tough Stance on Compliance, Revokes Licence of String AI IFSC Private Limited

The International Financial Services Centres Authority (IFSCA) has made a significant move in its enforcement drive, cancelling the broker-dealer registration of String AI IFSC Private Limited (formerly King Blockchain). This marks the first such licence revocation in GIFT City.

The cancellation order, passed on April 6, 2026, comes after a multi-year trail of non-compliance that began with surprise inspections in 2024, escalated through repeated warnings, and culminated in a formal show-cause notice (SCN) issued in December 2025. IFSCA had been monitoring the activities of String AI IFSC Private Limited closely, and the regulator has now taken decisive action.

The decision to revoke the licence is a direct result of the company's failure to demonstrate genuine "substance" - physical presence, proper staffing, and operational readiness - as mandated under the IFSCA Capital Market Intermediaries Regulations, 2025. Moneycontrol had previously reported that IFSCA has stepped up market-intelligence visits and issued a larger-than-previous batch of show-cause notices to capital market intermediaries (CMIs) operating in GIFT IFSC.

Read also: Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4

The cancellation of String AI IFSC Private Limited's licence sends a strong message to other CMIs operating in GIFT City. According to industry sources, the regulator is prepared to move beyond warnings and notices to actual licence cancellations when entities fail to comply with regulatory requirements.

Comparison of IFSCA Enforcement Actions

The revocation of String AI IFSC Private Limited's licence is being closely watched by the industry, as it directly addresses the compliance gaps highlighted in previous inspections. Industry sources say that certain CMIs had been put on notice for the same issues that plagued String AI, including minimal setups maintained largely to tap tax incentives under Section 80LA while falling short on actual on-ground operations.

Read also: MarketSmith India's 4 June Stock Recommendations

In a statement, a senior GIFT City executive noted that IFSCA has made it clear that letter-and-spirit compliance is non-negotiable. "This is no longer just about ticking boxes during registration; it's about running a real office with real people who know the rules."

With over 200 registered FMEs and hundreds of CMIs already operational, the regulator has reiterated its commitment to building a transparent and robust financial ecosystem in the IFSC, even as GIFT City continues to attract new fund management entities and intermediaries.