Google pulled several cryptocurrency exchanges, including Binance and Kraken, from the Play Store in India on Saturday, the latest blow to India’s already dwindling Web3 dream.
The ban comes two weeks after these global companies were reported for operating “illegally” in the country. The Financial Intelligence Unit (FIU), an Indian government agency that audits financial transactions, late last month issued show cause notices to nine cryptocurrency companies and alleged that they were not compliant with India’s anti-money laundering rules. Apple pulled the apps earlier this week, and on Thursday evening, ISPs in India began blocking the URLs of cryptocurrency exchange sites.
The FIU has asked the Indian Ministry of Information Technology to block the websites of all nine services in India. Other exchanges whose apps have been pulled are Huobi, Gate.io, Bittrex, and Bitfinex.
“We are aware of an IP block affecting a number of cryptocurrency companies, including Binance. This only affects users trying to access the Indian iOS App Store or the Binance website from India,” Binance said earlier on Saturday.
“Existing users who already have the Binance app are not affected. We remain committed to adhering to local regulations and laws, and are committed to maintaining active communication with regulators to ensure user protection and the development of a healthy Web3 industry.
Many Indian traders have turned to global cryptocurrency platforms in recent quarters in an apparent move to evade taxes. India began taxing virtual currencies last year, imposing a 30% tax on gains and a 1% rebate on every cryptocurrency transaction. Cryptocurrency exchanges in India, including a16z-backed CoinSwitch Kuber, B Capital-backed CoinDCX and former Binance partner WazirX, continue to require strict KYC checks before onboarding new users, but the same has not been true for many global companies. . Platforms. (Trading volume on WazirX has fallen by a staggering 97% in two years, partly due to many traders moving to global apps.)
“CoinSwitch and CoinSwitch PRO, as well as many other Indian VDA exchanges, are already compliant with India’s PMLA requirements for VASPs, and there is no reason why offshore exchanges cannot do the same, if they wish to do business in India.” Ashish Singhal, co-founder and CEO of CoinSwitch, wrote on X earlier this week. “Offshore exchanges should actively consider registering with FIU-IND and complying with India’s AML/CFT measures. This is also better for consumer protection in India as there will be greater regulatory oversight of the ecosystem.”
Indian cryptocurrency exchanges CoinDCX and CoinSwitch Kuber had previously warned the New Delhi government that its new tax policy on cryptocurrencies would lead many users to switch to decentralized exchanges or look for incompatible services. CoinDCX announced on Tuesday that it will offer rewards to customers who move their crypto assets from global exchanges to its platform in India.
India has historically taken a tough stance on cryptocurrencies and the companies that enable their trading. The Reserve Bank of India implemented a ban on cryptocurrencies in the country about five years ago. While India’s Supreme Court eventually overturned that ban, the central bank has continued to call for a ban on cryptocurrencies ever since, and its top officials have likened virtual digital assets to a Ponzi scheme.
Coinbase, another popular global cryptocurrency exchange, stopped taking on new customers in India last year. Coinbase CEO Brian Armstrong claimed in 2022 that the company was facing “unofficial pressure” from India’s central bank.