India's Financial Intelligence Unit (FIU), a government agency overseeing financial transactions, has identified nine global cryptocurrency exchanges, including Binance, Kraken, Kucoin, and Mexc, operating "illegally" in the country.
According to TechCrunch, the FIU alleged that these crypto exchanges have not complied with India's anti-money laundering (AML) act, prompting the agency to issue show cause notices to all nine firms and request the Ministry of Information Technology to block their websites.
India Blocking 9 Crypto Exchanges
According to the FIU, global crypto exchanges must adhere to India's AML rules, even though they don't have a physical presence in the country.
The agency noted that offshore entities serving many Indian users should register and comply with the AML and Counter Financing of Terrorism (CFT) framework. In March, India incorporated cryptocurrencies into its AML/CFT framework, with the FIU registering a total of 31 crypto firms.
However, concerns were raised about offshore entities evading registration and framework requirements. India also introduced taxes on virtual currencies last year, imposing a 30% tax on gains and a 1% deduction on each crypto transaction.
Many Traders in India Switched to Global Crypto Platforms
While domestic exchanges like CoinSwitch Kuber and CoinDCX uphold stringent KYC verifications, many global platforms lack similar rigorous procedures.
This leniency has contributed to a notable decline in trading volume on Indian platforms, exemplified by WazirX experiencing a significant 97% drop in two years, according to TechCrunch.
Other crypto exchanges identified by the FIU violating India's laws were Huobi, Gate.io, Bittrex, Bitstamp, and Bitfinex. Coinbase has already stopped consumer sign-ups in India several months ago.
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