India’s Crackdown on Cryptocurrency Exchanges

The Indian government has blocked access to the websites of several leading offshore cryptocurrency exchanges, including Binance, Kucoin, OKX, Gate.io, and many others, as of January 12, 2024.

🚨 BREAKING: 🇮🇳 #Binance, Kucoin and Mexc websites are now not accessible in India 😳 pic.twitter.com/J5WNozyGZq

— Keyur Rohit (@CryptoKingKeyur) January 12, 2024

This decisive action follows the earlier removal of these platforms from the Apple App Store in India. The blockade was instituted in response to these exchanges’ non-compliance with the country’s money laundering laws, a concern raised by the finance ministry in show-cause notices issued to these platforms on December 28, 2023. The notices targeted exchanges like Binance, Kucoin, Houbi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, accusing them of operating illegally in India due to their failure to register and adhere to local tax regulations. In light of these alleged violations, the finance ministry directed the information technology ministry to block their URLs, leading to the current restrictions on these websites​​​​​​.

Binance’s Response and Assurance to Indian Users

Reacting to the situation, Binance communicated to its customers in India, explaining that the blockade affects those attempting to access the Indian iOS app store or the Binance website from within the country. However, they assured existing users with the Binance app that they would not be impacted by these restrictions. Binance reaffirmed its commitment to complying with local regulations and laws and stated its intent to maintain active communication with regulators to ensure user protection and support the growth of a healthy Web3 industry. They also reassured their users that all funds are secure. However, as of now, there has been no official response from Kucoin and OKX regarding this situation​​.

Wider Impact on the Crypto Industry in India

The recent crackdown on offshore exchanges has led to a significant increase in deposits on Indian crypto exchanges. CoinDCX, one of India’s leading crypto exchanges, reported a notable surge in deposits since the show-cause notice was issued to the non-compliant exchanges. This reflects a shift of investors from offshore to FIU-compliant exchanges, seeking a safe and seamless transition. The wider implications of these actions highlight India’s increasing regulatory measures in the cryptocurrency sector.

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