India has recently taken strict measures against offshore cryptocurrency exchanges by directing Apple to remove apps from crypto exchanges such as Binance from its App Store within the country. This move comes after the Financial Intelligence Unit (FIU) issued a notice targeting nine platforms suspected of regulatory misconduct in late December.
India’s Ministry of Electronics and Information Technology has prompted the removal of apps from the App Store of platforms such as Bitfinex, HTX, and Kucoin. Although these directives were not made public, sources familiar with the matter disclosed this intervention.
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, are entities operating illegally within India’s crypto landscape.
Additionally, India has 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.
Virtual digital assets service providers operating in India must comply with anti-money laundering laws. 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.