Once a land of opportunity, India’s cryptocurrency market is in a regulatory slump. As authorities tighten their grip, major crypto exchanges are struggling to survive, facing restricted services, hefty fines and even exit.
Failure to pass KYC test
Global giant Binance, a household name in the cryptocurrency world, has learned the harsh truth that Indian Regulatory Landscape Earlier this year, the Financial Intelligence Unit of India (FIU-IND) accused Binance of operating illegally and failing to adhere to KYC (Know Your Customer) standards.
This led to a months-long suspension of services for Indian users, followed by a hefty $2.25 million penalty for violating the Prevention of Money Laundering Act (PMLA). Binance’s attempt to restore trust came in the form of a recent collaboration with Indian authorities to recover $10 million in stolen funds. It remains to be seen whether this gesture will be enough to appease regulators.
Go out and adapt
While some exchanges like OKX gave up, unable to navigate the complex regulatory maze, others like Kucoin emerged as the winners. Kucoin’s success story is that it became the first fully compliant cryptocurrency exchange in India.
This achievement highlights the importance of adapting to the new normal – a market where clear regulatory approval is key to survival. Kraken and Bitfinex, once major players, are now facing restricted services, a stark reminder of the consequences of non-compliance.
Petgett: Can they avoid the knockout blow?
The latest entrant into the Indian organizational ring is Petgetta popular exchange that faces user restrictions. With its Indian user base unable to fully access the platform, Bitget has vowed to navigate the regulatory maze and ensure compliance.
1/ We are aware of the current difficulty in accessing the Bitget platform in India. We are actively exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements.
— Bitget India🇮🇳 (@BitgetIndia) July 3, 2024
In order to facilitate the smooth provision of the service to users in the region, the exchange explained that it is looking into ways to ensure compliance with local standards.
The exchange acknowledged that users in India are now facing issues accessing the Bitget platform. “We are actively exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements,” Bitget revealed.
Their success depends on License Insurance Before the Indian authorities deal them a fatal blow, which may force them out of the lucrative Indian market.
The Future of Cryptocurrencies in India
India’s stance on cryptocurrencies reflects a global trend: a desire to harness the potential of this new asset class while mitigating the risks associated with money laundering and financial instability. The 30% tax on cryptocurrency income shows the government’s attempt to integrate cryptocurrencies into the mainstream financial system.
While the current regulatory environment may seem harsh on some exchanges, it could pave the way for a more mature and responsible cryptocurrency market in India in the long run.
Featured image from Euronews, chart from TradingView
