Regulatory Ripples: Indian Government Sends Notices to Binance and Kraken, Probing Legal Compliance Status
As of Wednesday, January 10, Apple’s App Store in India appears to have excluded several foreign crypto exchanges, including notable platforms like Binance and Kraken. Numerous members of India’s crypto community shared screenshots depicting the absence of search results for these exchanges on the App Store. This development coincides with a heightened focus from the Indian government, emphasizing the imperative for all crypto firms operating in the country to register with the appropriate authorities.
The sudden disappearance of these foreign exchanges from the App Store transpired shortly after the issuance of notices by the Indian government, seeking updates on the legal compliance statuses of platforms like Binance and Kraken. Approximately a week earlier, the Indian Financial Intelligence Unit (FIU) had advocated for a potential ban on these crypto exchanges until they demonstrated their compliance with India’s existing crypto laws.
This unexpected event has sparked active discussions within India’s crypto community on social media platforms, with members exploring potential reasons and implications behind the disappearance of these apps from Apple’s ecosystem in the country. Alongside Binance and Kraken, searches for Mexc, Huobi, and Gate.io on the App Store are also yielding no desired results, further intensifying the discourse surrounding the state of crypto exchanges in India.
The absence of foreign crypto exchanges like Binance and Kraken from Apple’s App Store in India appears to be aligned with the ongoing regulatory initiatives in the country, particularly in addressing concerns related to tax evasion within the crypto sector. Following India’s imposition of taxes on crypto incomes in the previous year, many Indian traders opted to transfer their deposits to offshore international exchanges. The tax regime mandates a 30 percent tax on all crypto earnings and a one percent Tax Deducted at Source (TDS) on all crypto transactions for Indian users. The implementation of these laws in 2022 led to a significant decline in trading volumes for Indian crypto exchanges.
The current regulatory push by the Indian government aims to curtail the potential misuse of crypto for criminal activities and simultaneously promote the usage of native exchanges. The government’s strategic move involves encouraging offshore exchanges to register with the Financial Intelligence Unit-India (FIU-IND). This initiative seeks to enhance compliance with Indian laws pertaining to taxation, the Prevention of Money Laundering Act (PMLA), and Know Your Customer (KYC) norms. The overarching goal is to level the playing field between Indian and offshore exchanges, reinforcing compliance mechanisms and bolstering consumer protection. Ashish Singhal, Co-founder and Group CEO of PeepalCo, underscores the significance of this move, stating that it not only strengthens compliance but also fosters a more secure environment for consumers in India.