Following the country’s Ministry of Finance’s Financial Intelligence Unit’s ban on offshore cryptocurrency exchanges like Binance, OKX, and others, Indian cryptocurrency exchanges are offering hassle-free transfers to users wishing to move their cryptocurrency holdings from overseas exchanges.
For users whose money is stranded on prohibited international cryptocurrency exchanges, a few Indian cryptocurrency exchanges have developed profitable fee waiver programs. One of the biggest cryptocurrency exchanges in India based on trading volume, CoinDCX, revealed that it has allocated $1 million to assist consumers in transferring their holdings to other cryptocurrency exchanges.
Indian investors own cryptocurrency on offshore markets valued at an estimated USD 4 billion. Users who have been trading on offshore markets are concerned about their assets in light of recent legislative developments. In order to carry on with their cryptocurrency adventure, they wish to transfer to a secure and legal exchange. CoinDCX CEO Sumit Gupta told Cointelegraph:
Following action against non-compliant exchanges, CoinDCX witnessed a staggering surge in new users, further solidified by their $1 million fund helping investors move assets safely. The exchange has established safe deposit channels for a seamless changeover and is actively assisting users by offering simple cryptocurrency deposits with a 1% incentive.”
Subsequently, in light of the FIU restriction, BuyUcoin, another Indian cryptocurrency exchange, announced fee-free transfers for users from offshore exchanges. The CEO of BuyUcoin, Shivam Thakral, told Cointelegraph that the FIU’s action is a step in the right direction towards safeguarding investors and implementing capital flight laws and regulations on foreign exchange businesses.
Another well-known exchange, WazirX, has provided a 1% bonus for users who move their cryptocurrency to WazirX. As a result, from November to January, compared to the prior three months, they witnessed an increase of 114% in deposits (crypto + INR), 253% in spot trading volume, and 42.3% in P2P transactions. Vice president of WazirX Rajagopal Menon told Cointelegraph that the FIU’s latest steps were long overdue.
It was, I believe, long overdue. Regulating and tax arbitrage were allowing foreign exchanges to profit at the expense of Indian exchanges. Everyone suffered from the situation: Indian exchanges lost market share, users had no redress, and the government lost tax income.
On December 28, 2023, Bittrex, Bitfinex, MEXC Global, Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, and MEXC Global received a notice of noncompliance from the FIU, a branch of the Indian Finance Ministry, for engaging in illicit operations within India. The FIU advised the IT department to block the URLs of the foreign cryptocurrency exchanges listed in the notice, and the exchanges had a week to respond to the notice.
It was still accessible on the Android app market on January 10, over two weeks after the FBI received word that Apple’s Indian app store had prohibited all foreign cryptocurrency exchanges. These international cryptocurrency exchanges were removed from Google’s app store within a week. Indian users, who had rushed to overseas cryptocurrency exchanges like Binance in order to avoid a hefty 30% crypto tax, were fearful as a result.
Numerous Indian crypto influencers talked about using virtual private networks as one of the alternate methods for people to access sites that are prohibited in India. BuyUcoin emphasizes the importance of using secure and established platforms for managing crypto assets, highlighting the dangers of resorting to unverified alternatives.
According to reports, OKX has begun requesting that Indian users amend their personal data in order to abide by local laws, which is a step in the direction of FIU compliance.