India Targets Overseas Crypto Exchanges Like Binance For Operating Illegally

India is taking decisive action against foreign cryptocurrency exchanges like Binance, Kraken, KuCoin, and Huobi, accused of operating without proper registration. The Financial Intelligence Unit (FIU) has issued compliance show-cause notices to these platforms and requested the Information Ministry to block their websites.

What Happened? This move aims to bring these entities under India’s Anti-Money Laundering and Counter Financing of Terrorism framework.

The Indian government has been tightening its grip on the crypto sector, introducing money-laundering rules and a transaction tax that significantly impacted local crypto exchanges.

The tax led to a drastic drop in trading volumes and pushed Indian traders towards offshore platforms, which don’t impose such levies. CoinDCX’s CEO, Sumit Gupta, noted that around 95% of trading volume has shifted to these offshore venues.

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The big guns: Binance, the world’s largest crypto exchange, has faced increasing scrutiny from global regulators. In 2021, India’s anti-money laundering agency investigated Binance’s potential involvement in a betting app case.

More recently, in November, Binance agreed to a $4.3 billion settlement with US authorities for anti-money laundering and sanction violations, leading to co-founder and CEO Zhao Changpeng’s resignation. The clampdown reflects India’s commitment to regulating the burgeoning digital asset market and aligning with global standards in overseeing cryptocurrencies.

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Posted In: CryptocurrencyMarketsanti-money launderingBinanceKrakenKuCoin