India Bans Foreign Crypto Platforms Including Binance and KuCoin: Guidance for Crypto Investors
Discover the latest updates on cryptocurrency regulations in India! Our experts provide valuable insights for Indian investors amidst the recent bans on foreign crypto platforms.
On Friday, access to the websites of major global cryptocurrency exchanges, including Binance, Kucoin, OKX, and others, was restricted in India.
This action was taken following show-cause notices issued by the Indian government to these crypto exchanges for non-compliance with the country’s money laundering laws.
The move reflects the government’s concerns regarding the regulation and oversight of virtual digital asset services to ensure adherence to financial laws and prevent potential money laundering activities.
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The situation is evolving, and stakeholders are closely monitoring developments in the regulatory landscape of cryptocurrency in India.
It must be noted that on December 28, 2023, show-cause notices were dispatched to prominent cryptocurrency exchanges, including Binance, Kucoin, Bittrex, Bitstamp, MEXC Global, Houbi, Kraken, gate.io, and Bitfinex.
The notices were issued due to the alleged illegal operation of these companies in India, as they were found to be non-compliant with the country’s registration and local tax regulations.
Consequently, the Finance Ministry instructed the Ministry of Information Technology to take action by blocking the URLs associated with these exchanges.
This development underscores the government’s commitment to enforcing regulatory compliance within the cryptocurrency sector and ensuring adherence to local financial and taxation laws.
In light of recent developments, Edul Patel, CEO of Mudrex, commented, “Responding to the FIU’s show-cause notices issued to non-compliant crypto exchanges, we have taken proactive measures by advising investors to transfer their funds to compliant platforms.
Additionally, we are offering dedicated support to facilitate seamless fund transfers from other exchanges, maintaining the highest standards of safety and compliance.”
What Should Investors Do Now? While Investing In Foreign Crypto Platforms
Edul Patel suggested, “Indian investors should always strive to keep their assets in FIU-compliant entities.
This not only provides them with a legal recourse in case of any fraudulent activity on their account but also ensures a higher level of security and regulatory adherence.”
What is FIU entity
- The Financial Intelligence Unit – India (FIU-IND) serves as the central national agency entrusted with the responsibility of receiving, processing, analyzing, and disseminating information related to suspected financial transactions.
- Its primary mandate is to share such information with enforcement agencies and foreign Financial Intelligence Units (FIUs).
- FIU-IND plays a crucial role in combating financial crimes by facilitating the exchange of intelligence and promoting collaboration among national and international authorities.
As reported on Friday, the Centre is considering the possibility of banning offshore cryptocurrency dealing apps, including platforms like Binance, if they are found to be in violation of the Money Laundering Act.
The potential blocking of access to these foreign platforms is anticipated to benefit domestic cryptocurrency exchanges.
Some of these local exchanges are already experiencing an increase in registrations, according to industry executives.
The move aligns with the government’s efforts to ensure compliance with financial regulations and to support the growth of the domestic cryptocurrency market.
Cryptocurrency assets held in Offshore Foreign Crypto Platforms, avoiding tax.
Industry estimates indicate that approximately $4 billion worth of crypto assets are currently held in offshore platforms, strategically avoiding the 1% tax deducted at source applied to virtual digital asset exchanges.
Insiders familiar with the matter have revealed that Binance holds nearly 80% of this amount.
- The significant presence of funds in offshore platforms suggests a potential motivation for regulatory scrutiny to ensure adherence to taxation and financial laws in the cryptocurrency space.
- Retail traders have not yet transferred their holdings to evade the tax levy.
- Only a small amount has returned to India. Individuals who have already downloaded the apps on their phones can still access their wallets, but withdrawals and UPI transfers will not be possible,” disclosed a source.
(Disclaimer: The recommendations, suggestions, views, and opinions provided by the experts are their own and do not represent the views of HydnewsToday )
