India’s cryptocurrency market, once a land of opportunity, is experiencing a regulatory freeze as authorities tighten control and major cryptocurrency exchanges struggle to stay afloat, facing service restrictions, hefty fines and even exits.
Failed KYC test
Global giant Binance, a well-known brand in the cryptocurrency world, has come to terms with the harsh reality Indian Regulatory Landscape earlier this year. The Financial Intelligence Unit of India (FIU-IND) accused Binance of illegal activities and failure to comply with KYC (Know Your Customer) norms.
This resulted in a months-long suspension of services for Indian users, followed by a hefty fine of $2.25 million for violating the Prevention of Money Laundering Act (PMLA). Binance’s attempt to regain trust came in the form of its recent cooperation with Indian authorities to recover $10 million in stolen funds. Whether this gesture of goodwill will be enough to appease regulators remains to be seen.
Exodus and adaptation
While some exchanges like OKX threw in the towel, unable to navigate the complicated regulatory maze, others like Kucoin emerged as winners. Kucoin’s success story is that it became the first fully compliant cryptocurrency exchange in India.
The achievement underscores the importance of adapting to the up-to-date normal – a market where clear regulatory approval is key to survival. Kraken and Bitfinex, once major players, now face reduced services, a stark reminder of the consequences of non-compliance.
Bitget: Will they manage to avoid the knockout?
The newest entrant to the Indian regulatory market is Bitgeta popular exchange that has been struggling with user restrictions. With their Indian user base unable to fully utilize the platform, Bitget has pledged to navigate the regulatory maze and ensure compliance.
1/ We are aware of the current difficulties in accessing the Bitget platform in India. We are actively exploring ways to support the region while ensuring that our platform meets the region’s compliance requirements.
— Bitget India🇮🇳 (@BitgetIndia) July 3, 2024
To facilitate service delivery to users in the area, the headquarters has made it clear that it is exploring ways to ensure compliance with local standards.
The exchange admitted that users in India are now having trouble accessing the Bitget platform. “We are actively exploring ways to support the region while ensuring that our platform meets the region’s compliance requirements,” Bitget revealed.
Their success depends on License Security before Indian authorities deal them a blow, potentially eliminating them from the lucrative Indian market.
The Future of Crypto in India
India’s stance on cryptocurrency reflects a global trend: a desire to capitalize on the potential of this up-to-date asset class while mitigating the risks of money laundering and financial instability. The 30% tax imposed on cryptocurrency earnings shows the government’s attempt to integrate cryptocurrencies into the mainstream financial system.
While the current regulatory environment may seem harsh to some exchanges, in the long run, it could pave the way for a more mature and responsible cryptocurrency market in India.
Featured image from Euronews, chart from TradingView
