India has now banned forex exchanges from operating in the country by blocking access to their websites and new app downloads.

On January 12, India blocked access to global cryptocurrency exchanges including Binance, KuCoin, and OKX. India has enacted IP blocking measures to prevent Indians from accessing the URLs of foreign cryptocurrency platforms.

However, as of the time of publication, Binance, OKX, and KuCoin’s websites are still accessible through Google Chrome without using a virtual private network (VPN). The Binance website is also accessible through Safari and Mozilla Firefox browsers without any VPN, but the OKX and Kucoin websites are not.

The Ministry of Electronics and Information Technology on January 10 asked Apple to restrict access to forex apps to Indians. As of this writing, both iOS and Android app stores have restricted Indians from accessing foreign cryptocurrency trading apps.

The move comes after the Finance Ministry's Financial Intelligence Unit (FIU) warned that some international exchanges may be involved in money laundering, a government official told The Economic Times.

curb foreign exchange

The warning comes about two weeks after the Financial Intelligence Unit issued show-cause notices to nine forex exchanges operating in India. These include Binance, KuCoin, Huobi, OKX, Kraken, Gate.io, MEXC Global, Bitfinex, and Bittrex.

The show-cause notice said the exchanges were operating illegally in India and did not comply with anti-money laundering laws. A show-cause notice is a formal document that alleges misconduct and requires a company to explain why disciplinary action should not be taken.

The show-cause notice, which gave the exchange two weeks to explain, expired on Friday.

Recently implemented restrictions will prevent Indians from downloading forex apps. However, those who have already downloaded the apps can still access them. However, there may be issues with withdrawing cryptocurrencies as UPI withdrawals will no longer be available.

Binance said in an email to users:

“We are working hard to develop constructive policies that will benefit every user and all market participants. All user funds are safe.”

Binance added that it remains “committed to complying with local regulations and laws.”

Exchanges boom in India

Since India implemented a 1% source tax deduction in 2022, users of Indian exchanges have been losing to foreign platforms. Some investors turn to overseas platforms to avoid taxes.

However, the recent restrictions are aimed at leveling the playing field as Indian investors have started flocking to local platforms. For example, according to Bloomberg, WazirX saw a 250% increase in deposit inflows in the four days after issuing the show-cause notice compared to the previous four days. WazirX was owned by Binance until an unceremonious and painful split in 2022.

WazirX rival CoinDCX has also added users since December 28. Mudrex, a local exchange backed by Y Combination, has added 30,000 new users since December 28, according to Bloomberg.

With foreign platforms becoming almost inaccessible, Indians looking to trade cryptocurrencies will have no choice but to use local platforms, which will see greater inflows of users and deposits. #印度 #交易所监管