Indian Crypto Exchanges Rally to Aid Users Amidst Foreign Exchange Bans
On December 28, 2023, the Financial Intelligence Unit took action against 10 foreign crypto exchanges by issuing a notice of noncompliance. Following the ban imposed by the Ministry of Finance Financial Intelligence Unit on offshore crypto exchanges such as Binance and OKX, Indian crypto exchanges are offering solutions for users looking to transfer their crypto assets seamlessly.
In response to the ban on foreign crypto exchanges, several Indian platforms are introducing attractive fee waiver arrangements to assist users with funds stranded on prohibited exchanges. CoinDCX, a prominent Indian crypto exchange in terms of trading volume, revealed a commitment of $1 million to aid users in migrating their assets to compliant crypto exchanges.
BuyUcoin, another Indian crypto exchange, announced a zero-fee transfer initiative for users from offshore exchanges as a response to the FIU ban. A spokesperson from BuyUcoin expressed support for the FIU's action, viewing it as a positive step towards investor protection and the enforcement of capital flight rules on foreign exchange entities.
The Financial Intelligence Unit issued noncompliance notices to Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex, and Bitfinex for their alleged illegal operations in India on December 28, 2023. The FIU recommended that the Ministry of Electronics and Information Technology consider blocking the websites if these exchanges fail to comply.
Approximately two weeks after the FIU's notice, Apple's India app store blocked access to all foreign crypto exchanges, with the Google Play store following suit within a week. This created concern among Indian users who had turned to foreign crypto exchanges to avoid a substantial 30% crypto tax. Despite discussions among Indian crypto influencers on alternative ways to access the banned platforms, including the use of virtual private networks, BuyUcoin cautioned against such actions, citing potential negative consequences such as the risk of losing crypto assets to phishing sites and online scams.