Google removed several crypto exchanges, including Binance and Kraken, from its Play Store in India on Saturday in the latest setback to India's web3 aspirations. This action came after the global crypto exchanges were flagged for operating illegally in the South Asian market two weeks ago.
The Financial Intelligence Unit (FIU), an Indian government agency overseeing financial transactions, issued show cause notices to nine crypto firms last month, alleging non-compliance with India's anti-money laundering rules. Apple removed the apps earlier this week, and telecom networks and internet service providers began blocking the URLs of the crypto exchange websites on Thursday evening.
The FIU requested India's IT Ministry to block the websites of all nine services in India. Other exchanges whose apps were removed are Huobi, Gate.io, Bittrex, and Bitfinex. Binance stated on Saturday that they were aware of an IP block affecting several crypto firms, including Binance. This only affects users trying to access the Indian iOS app store or the Binance website from India. Existing users with the Binance app are not affected. Binance emphasized their commitment to local regulations and laws and their dedication to communicating with regulators to ensure user protection and the growth of a healthy Web3 industry.
Is India done with crypto?
Despite India's high capital gains tax and transaction levy, many domestic cryptocurrency traders have moved to global platforms with less stringent know-your-customer protocols. This regulatory arbitrage, combined with a broader crypto winter, led to a 97% decline in trading activity on WazirX, a popular Indian exchange. Well-funded Indian platforms like CoinSwitch Kuber and CoinDCX still require strict identification verification, while traders switching to international competitors are avoiding scrutiny, leading to concerns about tax evasion.
Ashish Singhal, co-founder and CEO of CoinSwitch, emphasized the importance of compliance with India's anti-money laundering and counter-terrorism financing measures for both Indian and offshore exchanges operating in India. He highlighted the benefits of greater regulatory oversight for consumer protection in India.
India has historically maintained a tough stance on cryptocurrencies and the companies facilitating their trade. The Reserve Bank of India implemented a cryptocurrency ban in the country five years ago, which was later overturned by the Supreme Court. However, the central bank continues to push for outlawing crypto, equating virtual digital assets to a Ponzi scheme.
