The Indian government’s decision to stop many of the world’s biggest crypto exchanges like Binance, Kucoin, and OKX will have a far-reaching impact on the country’s cryptocurrency ecosystem. This was done to comply with India’s stringent anti-money laundering regulations.
This only shows that the government is still closely monitoring activities in its jurisdiction involving cryptos. Specifically, investigations were launched against various crypto exchanges, including Binance, Kucoin, Bittrex, Bitstamp, MEXC Global, Houbi, Kraken, gate.io and Bitfinex on December 28th last year. The reason behind them was that it was argued that these institutions had not been properly registered locally nor paid taxes as should have been done. Consequently, the Finance Ministry and the Ministry of Information Technology closed down the websites of these exchanges.
To deal with this situation, Edul Patel, Mudrex’s CEO, underscored his company’s proactivity in guiding investors to the FIU-compliant platform. Consequently, Mudrex has assisted its clients in moving their money to compliant systems with the highest safety and regulatory standards. Patel also advised Indian investors to consider investing their funds in FIU-certified firms as a safeguard against fraudsters.
Suppose Economic Times (ET) is anything to go by. In that case, the Indian Government can extend the ban on any other offshore cryptocurrency trading apps under the Money Laundering Act if they break any regulations.
The move to block these international platforms is expected to benefit local digital money exchanges, some of which have already indicated a significant increase in new sign-ups. Insiders say these offshore platforms host almost $4bn in cryptocurrencies to avoid India’s one percent levy on virtual currency transactions. These assets are believed to represent around 80% of all such holdings by Binance alone.
Still, many retail traders have not moved their holdings back to India due to these regulatory measures to avoid tax. However, the wallets of those who had earlier downloaded the apps on their devices remain functional. However, according to a highly placed source, there is now a bar on new dealings, including withdrawals and UPI transfers.
The government’s position reflects an upward global tendency of more restrictions and control in the crypto market. To Indian investors, this situation highlights the need to stay alert and flexible so that their investments match the developing regulatory systems. Being knowledgeable and adhering to rules will be necessary for people moving within this energetic market, which is getting more attention every day.
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