Cryptocurrency exchange OKX is shutting down its services in India, according to an email sent to users on Thursday. The exchange has advised its Indian customers to withdraw all funds by April 30th.
Following App Removals by Apple & Google
This move comes after Apple and Google removed the OKX app from their respective Indian stores. The action stemmed from a warning issued by the Financial Intelligence Unit (FIU), a government agency in India. The FIU had flagged several crypto exchanges, including Binance, Kraken, Huobi, and Gate.io, as operating illegally in the country. Notably, OKX was not explicitly named in the public statement by FIU.
Regulations Prompt Exit
OKX attributed its decision to exit the Indian market to “local regulations.” The exchange has asked its Indian users to close any active margin positions and withdraw all funds by the April 30th deadline.
India’s Regulatory Landscape for Crypto
In March 2023, India brought cryptocurrencies under the purview of its anti-money laundering (AML) and counter-financing of terrorism (CFT) framework. While dozens of domestic exchanges, including CoinSwitch and CoinDCX, complied by registering with FIU, several foreign exchanges remained non-compliant. The FIU raised concerns about these non-compliant platforms in late 2023.
Tax Implications and KYC Discrepancies
The decision by some Indian crypto traders to shift to global platforms appears to be a potential strategy to avoid taxes. India began taxing virtual digital assets (VDAs) in 2022, imposing a 30% tax on gains and a 1% deduction at source (TDS) on crypto transactions.
Indian crypto exchanges generally enforce stricter Know Your Customer (KYC) procedures during user onboarding compared to many global platforms. Notably, Coinbase also halted new user sign-ups in India last year.
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