India has ramped up its regulatory measures against offshore cryptocurrency exchanges, directing Apple to remove apps from crypto exchanges such as Binance from its App Store within the country.
According to a report by Bloomberg, this recent escalation follows a notice from the Financial Intelligence Unit (FIU) targeting nine platforms suspected of regulatory misconduct in late December.
India's Ministry of Electronics and Information Technology has prompted the removal of apps of platforms like Bitfinex, HTX, and Kucoin, among others, from the App Store. While these directives were not made public, sources familiar with the matter disclosed this intervention.
Intensifying Crypto Crackdown
India's stance against offshore crypto platforms heightened last December following notifications issued to exchanges suspected of operating unlawfully. Concerned about the potential loss of access to funds, Indian crypto traders had already begun shifting deposits to locally compliant exchanges adhering to the nation's regulations.
The FIU issued compliance show cause notices to nine offshore exchanges, urging the Ministry of Electronics and Information Technology to block their URLs. These notices named Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex as entities operating illegally within India's crypto landscape, Finance Magnates reported.
Additionally, Asia's second-most populous country implemented anti-money laundering provisions within the crypto sector, adding a 1% levy called Tax Deducted at Source (TDS). This step reportedly led to a migration of trading volumes to offshore venues. Local exchanges were affected as traders sought platforms that did not impose this tax, significantly reducing their trading revenues.
Crypto Regulatory Obligations in India
Besides that, the obligation to comply with India's anti-money laundering laws applies to the operations of virtual digital assets service providers. These regulations mandate reporting, record-keeping, and registration, highlighting the significance of abiding by local laws, even for offshore exchanges.
The stringent regulations in India’s crypto sector have caused some crypto exchanges to reduce their workforce. Following similar moves in the crypto market, India’s crypto exchange CoinDCX opted to lay off 12% of its employees. Alongside challenging macroeconomic conditions, the company attributed a significant portion of its struggles to the TDS regulations imposed by the Indian government.
This article was written by Jared Kirui at www.financemagnates.com.
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