India Blocks Access to Foreign Crypto Platforms, App Ban Likely
India has blocked access to the web platforms of foreign cryptocurrency exchanges and virtual digital asset service providers like Binance, Kucoin, and OKX. The Android versions of these apps are also expected to be taken down soon. The move follows concerns raised by the finance ministry’s Financial Intelligence Unit (FIU) about possible money laundering activities on these platforms.
The action is expected to benefit domestic cryptocurrency exchanges, which have already seen a surge in registrations. The government’s actions against these offshore platforms were based on reports and show-cause notices issued by the FIU. These platforms were operating without necessary permits and approvals, and there were instances of illegitimate use and money laundering.
Further investigations are underway, with the FIU having issued notices to Binance and eight other cryptocurrency exchanges. These exchanges were given two weeks to respond, but they failed to do so. The FIU recommended that access to the URLs of these platforms be blocked, leading to the government’s decision.
These global cryptocurrency exchanges do not have registered entities in India and are causing a tax leakage of around Rs 3,000 crore ($408 million) annually. Many Indian crypto investors are confused and caught off guard by this development. It is estimated that nearly $4 billion worth of crypto assets are still held in offshore platforms to avoid tax deductions.
This move is expected to benefit domestic cryptocurrency exchanges like CoinDCX, which has seen a significant increase in registrations since the FIU notice. The platform has opened deposit routes and is offering incentives for users who wish to make the shift.
Hot Take: India Takes Strong Action Against Foreign Crypto Platforms
India has taken decisive action by blocking access to foreign cryptocurrency platforms due to concerns about money laundering. This move is likely to protect domestic cryptocurrency exchanges and prevent tax leakage caused by offshore platforms. While this may cause confusion among Indian crypto investors, it presents an opportunity for domestic exchanges to attract more users. Platforms like CoinDCX have already seen a surge in registrations and are offering incentives for users to make the shift. This bold move by the Indian government demonstrates its commitment to regulating the crypto market and ensuring compliance with necessary permits and approvals.
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