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.
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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