In a significant move, the Indian Ministry of Finance has ordered the removal of ten cryptocurrency exchanges, including prominent platforms such as Binance and KuCoin, from Apple’s App Store in India. This action comes after the Financial Intelligence Unit (FIU) accused these exchanges of operating illegally within the country and failing to comply with anti-money laundering regulations.
The FIU, on December 28, 2023, notified the exchanges and subsequently requested the Ministry of Electronics and Information Technology to block their applications. According to FIU, cryptocurrency exchanges operating in India should register as reporting entities and fulfill their obligations by making necessary filings with the income tax department.
The affected exchanges also include Bitget, Huobi, Gate.io, OKX, Kraken, and MEXC. The removal of these applications from the App Store implies that they will no longer be accessible to new users in India.
This action is part of India’s broader efforts to increase compliance with local laws and regulations regarding cryptocurrency trading. The country has been intensifying its regulatory measures to bring exchanges into compliance and combat issues such as tax evasion. In 2022, India imposed a 30% tax on crypto holdings and transfers, accompanied by a 1% tax at source for each cryptocurrency trade made.
The move to block offshore exchanges aims to level the playing field, as Indian crypto traders had increasingly shifted their investments to foreign platforms following the introduction of taxes on digital asset incomes in 2022. While local exchanges in India have faced stringent requirements, including Know Your Customer (KYC) procedures, foreign platforms have operated with less scrutiny.
Binance South Asia responded to the development, assuring its existing users that they won’t be affected. The company expressed awareness of the changes and emphasized its commitment to complying with local regulations. Binance pledged to work closely with regulators to resolve the situation and maintain an open dialogue.
The decision by the Indian government to block these cryptocurrency exchanges from the App Store reflects the ongoing efforts to regulate the crypto sector within the country. India continues to advocate for global collaboration in regulating the industry, seeking a balance between compliance and fostering a conducive environment for crypto-related activities.
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