Key takeaways:
- About three months after nine foreign crypto exchanges received compliance letters from the FIU of India, OKX is shutting down its operations in India.
- Within two weeks of receiving the information, the FIU asked the Ministry of Electronics and Information Technology to prohibit the websites of the notified crypto exchanges.
About three months after nine foreign cryptocurrency exchanges received compliance letters from the Financial Intelligence Unit (FIU) of the Indian Ministry of Finance, OKX is shutting down its operations in India.
Indian users received a notification from OKX on March 21 asking them to terminate their accounts and retrieve their money by April 30. The primary rationale for the decision was given by the cryptocurrency exchange as local regulatory obstacles.
Within two weeks of receiving the information, the FIU asked the Ministry of Electronics and Information Technology to prohibit the websites of the notified crypto exchanges.
OKX introduced a new registration procedure with stringent Know Your Customer checks after the government suspended its website and application in January. Nevertheless, the letter it sent to consumers implies that the exchange will no longer be active in India.
Despite being a booming market, India remains a challenging area for foreign cryptocurrency exchanges to operate in because of unclear regulatory requirements and stringent government policies.
Despite nearly four years of talks about a regulatory framework, the Indian government seems unwilling to recognize or even slightly regulate the nascent cryptocurrency sector.
Although there is no timeframe for India to enact formal crypto rules, several well-established players have been compelled to relocate due to the high 30% tax on crypto income, which does not allow for loss mitigation, and the 1% tax deducted at source (TDS) on each crypto transaction.
In a recent interview, the Indian Finance Minister stated that the government has not yet provided a clear regulatory framework since cryptocurrencies cannot be treated the same as fiat currencies.
But this has been the standard response from governments all around the world and has nothing to do with controlling the cryptocurrency market, as players in the market are not requesting that cryptocurrency be given the same weight as national fiat currency, but rather more precise laws that are more akin to those governing the traditional stock market.
