New Delhi: Google has removed several cryptocurrency exchanges, including Binance and Kraken, from its Play Store in India, dealing a blow to the country’s ambitions in the web3 space. This move follows a recent crackdown by the Financial Intelligence Unit (FIU), a government agency overseeing financial transactions, which issued show-cause notices to nine crypto firms for alleged non-compliance with India’s anti-money laundering rules. Apple had already removed the apps, and telecom networks and internet service providers started blocking the URLs of these exchanges. Other affected platforms include Huobi, Gate.io, Bittrex, and Bitfinex.
The FIU had requested the Ministry of Information Technology to block the websites of these services in India. The ban is part of a broader regulatory environment in India, with a 30% capital gains tax and a 1% transaction levy imposed in 2022. Many Indian cryptocurrency traders had shifted to global platforms with less strict know-your-customer protocols, contributing to a 97% decline in trading activity on the popular Indian exchange, WazirX.
The migration of traders to platforms with laxer regulations has raised concerns about tax avoidance, especially with well-funded Indian platforms like CoinSwitch Kuber and CoinDCX adhering to stringent identification verification. Some voices within the industry advocate for offshore exchanges to register with the FIU-IND and comply with India’s anti-money laundering and counter-terrorist financing measures for the sake of consumer protection and regulatory oversight.
India has a history of taking a tough stance on cryptocurrencies, with the Reserve Bank of India imposing a ban on them five years ago. Although the Supreme Court later overturned the ban, the central bank has continued to push for outlawing crypto, likening virtual digital assets to a Ponzi scheme.
