Technology

The Great Crypto Purge: Popular Exchanges Banned from App Store!

Indian Financial Intelligence Unit Takes Action Against Major Cryptocurrency Exchanges

In a significant move towards regulating the cryptocurrency industry, the Indian Financial Intelligence Unit (FIU) has taken measures against major exchanges, including Binance, Kraken, Mexc, and Kucoin. These exchanges have had their applications removed from the Apple App Store in India. This action follows the implementation of new taxation rules on virtual currencies in the previous year.

At the end of December 2023, the FIU issued show cause letters to nine cryptocurrency companies, accusing them of violating India’s anti-money laundering legislation. Among the exchanges targeted are Huobi, Gate.io, Bittrex, and Bitfinex. Currently, the only identified exchange with an active app in India’s App Store is Bitstamp.

The FIU’s actions reflect the growing scrutiny and regulatory pressure faced by the cryptocurrency industry in India. The country introduced a taxation policy in 2023, which includes a thirty percent tax on earnings from cryptocurrency transactions and a one percent deduction for each transaction. In response to the strict regulatory environment, many Indian traders have shifted their operations to global cryptocurrency platforms in an attempt to avoid these taxes. However, Indian-based exchanges such as CoinSwitch Kuber and CoinDCX continue to implement stringent know-your-customer (KYC) verifications.

The FIU has recommended that the Ministry of Electronics and Information Technology (MeitY) restrict the URLs of the targeted exchanges in India. This step is crucial in curbing the activities of these global platforms within the country, ensuring compliance with India’s Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework as outlined in the Prevention of Money Laundering Act (PMLA) of 2002.

By taking these actions, the FIU has demonstrated India’s commitment to regulating the cryptocurrency industry and safeguarding its financial system from the potential risks associated with unregulated digital assets. The Indian government aims to send a strong message about its stance on maintaining compliance within the cryptocurrency industry by targeting key businesses like Binance and Kraken.

CoinDCX and CoinSwitch Kuber, two Indian-based cryptocurrency exchanges, have previously warned the government that the new tax policy may drive customers towards decentralized exchanges or services that do not comply with regulations. The recent crackdown on exchanges reflects the government’s determination to manage the cryptocurrency market and prevent evasion of the legal framework.

As the situation continues to develop, it will be crucial to monitor the reactions of these global exchanges and the impact this will have on the cryptocurrency market in India as a whole. The Indian government’s firm stance may potentially transform the landscape of digital currency trading in the country, affecting both traders and exchanges.

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