India to block crypto exchange websites in widening crackdown
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India is clamping down on overseas crypto exchanges like Binance, moving to block local access to their websites.
PHOTO: REUTERS
NEW YORK - India is clamping down on overseas crypto exchanges such as Binance that it says are operating illegally, moving to block local access to their websites.
The Financial Intelligence Unit (FIU) issued so-called compliance show-cause notices to several platforms, including Binance, Kraken, KuCoin and Huobi. It also asked the Information Ministry to block the URLs of the nine entities, according to a statement on Dec 28.
“Several offshore entities though catering to a substantial part of Indian users were not getting registered and coming under the Anti-Money Laundering and Counter Financing of Terrorism framework,” the FIU said in the statement.
India’s government in 2023 imposed money-laundering provisions on the crypto sector as it tightens oversight of digital assets along with other countries. In 2022, the authorities delivered a major blow to local crypto exchanges by introducing a tax on transactions that caused trading volumes to plummet.
A show-cause notice is issued when an individual or entity is suspected of misconduct. It is an official request to demonstrate that the person or entity is complying with Indian laws.
Local exchanges have complained that the new tax drove Indian crypto traders to offshore platforms that did not impose the levy, further hurting their revenues.
CoinDCX chief executive officer Sumit Gupta in October estimated that 95 per cent of trading volume has moved to offshore venues.
Bloomberg News reported in 2021 that India’s anti-money laundering agency was examining if Binance had a role to play in an investigation involving betting apps. A Binance spokesperson did not immediately respond to a request for comment.
Binance, the largest crypto exchange, has come under increased pressure from regulators around the world in the past year.
In November, the company agreed to pay US$4.3 billion (S$5.7 billion) as it pleaded guilty to anti-money laundering and United States sanction violations. As part of the agreement with the US authorities, co-founder and CEO Zhao Changpeng agreed to step down. BLOOMBERG
