India blocked access to websites of several offshore crypto exchanges, including Binance, Kucoin, OKX , Gate.io and many others on January 12 . This action followed the removal of these platforms from the Apple App Store in the country just a few days earlier.
The move is a consequence of the finance ministry issuing show-cause notices to these platforms on December 28, citing non-compliance with the country’s money laundering laws.
The notice was directed at Binance, Kucoin, Houbi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, accusing them of operating illegally in India by failing to register and adhere to local tax regulations.
In response to the alleged violations, the finance ministry instructed the information technology ministry to block the URLs of these platforms, leading to the recent website restrictions. However, the websites of thse exchanges can still be accessed through VPNs.
Binance Assures Indian Users Their Funds are Safe
Confirming the situation, Binance sent an email to its customers in India, clarifying that it only impacts users attempting to access the Indian iOS app store or the Binance website from India. However, existing users with the Binance app are reportedly unaffected by the restriction.
Binance emphasized its commitment to complying with local regulations and laws, asserting active communication with regulators to ensure user protection and foster the development of a healthy Web3 industry.
The platform reassured users that all funds are secure and asked users to reach out to them on Twitter via direct messages.
While Binance acknowledged the broader impact on other Web3 industry players, it emphasized collaborative efforts to contribute to constructive policy-making benefiting users and market participants. As of now, there has been no response from Kucoin and OKX to emailed queries regarding the situation.
Indian Exchanges Report Higher Deposits Amid Crackdown on Offshore Exchanges
Commenting on the ongoing wider crackdown on offshore exchanges over non compliance, the CEO and founder of India’s leading crypto exchange CoinDCX, Sumit Gupta, told Cryptonews:
Since the FIU show cause notice to non FIU compliant exchanges, CoinDCX has been actively supporting investors who wanted to return to FIU compliant exchanges. We have opened deposit routes and are diligently working to make this shift easier, prioritizing a safe and flawless experience for users. We have observed a notable increase in investors depositing crypto over the last week.
As reported earlier, CoinDCX reported a 2000% surge in users deposits since 28 December when India’s finance ministry sent show-cause notice to offshore crypto exchanges.
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