Google on Saturday pulled a number of crypto apps, including Binance and Kraken, from its Play store in India. The ban comes just two weeks after these global crypto apps were flagged for operating ‘illegally’ in the South Asian market. Indian government agency Financial Intelligence Unit (FIU), responsible for scrutinising financial transactions, late last month issued show cause notices to nine crypto firms and accused them of being non-compliant with India’s anti-money laundering rules.
Apple earlier in the week pulled the apps. Various telecom networks and internet service providers started blocking the URLs of the crypto exchange websites on Thursday evening.
FIU asked the IT Ministry to block the websites of all nine services in India. Apart from Binance and Kraken, other exchanges whose apps have been pulled are Huobi, Gate.io, Bittrex, and Bitfinex.
Prior to the implementation of this ban, Binance earlier on Saturday said, “We are aware of an IP block affecting a number of crypto firms, including Binance. This only impacts users who attempt to access the Indian iOS app store or the Binance website from India. Existing users who already have the Binance app are not affected. We remain committed to the adherence of local regulations and laws and we are dedicated to maintaining active communication with regulators to ensure user protection and the development of a healthy Web3 industry.”
Days Of Crypto In India Are Over?
A number of domestic cryptocurrency traders have shifted to global platforms with less stringent know-your-customer protocols amid India’s norm of 30 per cent capital gains tax and 1 per cent transaction levy imposed back in 2022.
Well-funded platforms such as CoinSwitch Kuber and CoinDCX demand rigorous identification verification. However, as per the fiscal authorities, defecting traders seem to have sidestepped such checks and verifications on certain international competitors, indicating a classic tax avoidance behaviour.
Ashish Singhal, co-founder and chief executive of CoinSwitch, earlier this week tweeted, “CoinSwitch and CoinSwitch PRO, as well as several other Indian VDA exchanges, are already compliant with India’s PMLA requirements for VASPs, and there is no reason why offshore exchanges shouldn’t do the same, should they wish to do business in India. Offshore exchanges should actively consider registering with the FIU-IND and comply with India’s AML and CFT measures. This is also better for consumer protection in India since there will be greater regulatory oversight of the ecosystem.”
The apps of several offshore VDA #exchanges have started getting blocked on app stores.
It seems that the Financial Intelligence Unit-India (FIU-IND) show cause notice dated 28 Dec 2023 and their proposed action on offshore VASPs is taking effect.
By asking offshore exchanges… pic.twitter.com/GMImfZA1T7
— Ashish Singhal (@ashish343) January 10, 2024
Edul Patel, CEO of Mudrex, told ABP Live, “In response to the FIU’s show cause notices to non-compliant crypto exchanges, we took proactive steps, advising investors to transfer their funds to compliant platforms. We are also providing dedicated support to ensure seamless fund transfers from other exchanges, upholding the highest safety and compliance standards. Indian investors should always aim to have their assets in the FIU compliant entities as it gives them a way for legal recourse against any fraudulent activity on their account.”
Since the inception of cryptocurrencies, India has had a tough stance against them and against the companies that enable their trading. The Reserve Bank of India even implemented a ban on cryptocurrencies around five years back.
This ban was eventually struck down by India’s Supreme Court but the central bank persisted in advocating for outlawing crypto since then. The top officials of RBI have likened the virtual digital assets to a Ponzi scheme.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.