Regulatory efforts concerning cryptocurrency markets continue worldwide. However, there’s an easier option. If you ban cryptocurrencies, you won’t need rules, or at least some countries seem to approach the matter with this absurd perspective. However, the situation in India is a bit more complicated. If the request is granted, access for a massive investor base in cryptocurrencies will be restricted.
Ban on Cryptocurrency Exchanges
India’s Financial Intelligence Unit has requested the blocking of 9 major cryptocurrency exchanges, alleging they operate illegally and violate Anti-Money Laundering rules. The institution had previously issued warnings. If the request is accepted, the following cryptocurrency exchange websites will be blocked:
- Binance
- KuCoin
- Huobi
- Kraken
- Gate
- Bittrex
- Bitsamp
- MEXC Global
- Bitfinex
According to a press release today, the Ministry of Electronics and Information Technology has already been asked to block these addresses.
“The Director of FIU IND has written to the Secretary of the Ministry of Electronics and Information Technology to block the URLs of these organizations that operate illegally without complying with the provisions of the PML Act in India.
So far, 31 VDA SPs have registered with FIU IND. However, some offshore entities have not registered and are not covered by the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) framework, despite serving a significant portion of Indian users.”
India and Cryptocurrencies
Cryptocurrency companies operating in the country, whether in India or offshore, are subject to certain rules. There are conditions such as reporting to the Financial Intelligence Unit and compliance requirements of the Prevention of Money Laundering Act (PMLA). India was at the top of Chainalysis’s 2022 global cryptocurrency adoption index and represents a significant part of the cryptocurrency ecosystem.
The increasing adoption of cryptocurrencies has prompted Indian regulators to take action. The country is working on a cryptocurrency regulation framework based on joint recommendations from the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The framework, planned to be published in 2024, is likely to include advanced KYC rules for crypto companies and require the publication of real-time reserve proofs.
However, it is undeniable that exchanges serving customers in the region may face a more negative approach during this process. In 2021, WazirX (the most popular exchange in the country) faced serious pressure for facilitating the outflow of funds abroad. Raids, operations, and sanctions were not much different two years ago.
And again, it was said that the crypto regulations mentioned today would be completed in 2021. But that did not happen.
