Apple’s Response to Regulatory Directive
In a significant move, Apple has removed several foreign cryptocurrency exchanges, including Binance, Kucoin, and OKX, from the App Store in India. The move comes in response to show-cause notices issued by India’s Ministry of Finance to nine virtual digital asset (VDA) service providers. The notice, sent on December 28, highlighted the exchange’s failure to comply with India’s money laundering laws and tax regulations.
Ministry of Strategy and Finance cracks down on offshore exchanges
The Treasury Department’s guidance is aimed at exchanges that have been operating in India without proper registration and compliance with local tax regulations. Among the affected platforms are several major platforms, including Binance, Kucoin, Houbi, and Kraken. The bill is consistent with the government’s efforts to regulate the cryptocurrency market and ensure compliance with the Anti-Money Laundering and Countering the Financing of Terrorism (CFT) guidelines under the Prevention of Money Laundering Act (PMLA).
Impact on Indian Cryptocurrency Market
Although not yet mirrored on the Google Play Store, the removal of these apps from the Apple App Store marks a significant change in the accessibility of offshore cryptocurrency exchanges in India. The move comes at a time when many Indian investors are turning to offshore exchanges to circumvent strict tax laws on cryptocurrency trading and income.
Binance’s response to the situation
In response to the removal, Binance assured X (formerly Twitter) users that existing app users would not be affected and that their funds would remain safe. The company emphasized its commitment to compliance with local regulations and ongoing dialogue with regulators around the world.
CoinDCX’s Initiative for Isolated Users
To capitalize on the situation and attract users to these offshore platforms, CoinDCX co-founder Sumit Gupta announced the launch of a $1 million treasury fund that will offer bonuses to users who transfer VDA to CoinDCX.
The bigger picture: Compliance and consumer protection
This development highlights the Indian government’s intention to bring offshore exchanges under the same compliance framework as domestic platforms. Ashish Singhal, Co-founder and Group CEO, PeepalCo & CoinSwitch, pointed out that the move aims to create a level playing field, strengthen compliance guardrails and enhance consumer protection.
Changes in the cryptocurrency environment
Apple’s decision to remove these cryptocurrency exchange apps from India’s app store marks a pivotal moment in the country’s approach to cryptocurrency regulation. This highlights the government’s efforts to ensure that all exchanges operating within its jurisdiction comply with local laws and norms, providing a more regulated and safer cryptocurrency environment for Indian investors.