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India Slams the Door on Crypto Exchanges
By Shane Addinall Jan 18, 2024 LegalityThe Indian government continues to crack down on top cryptocurrency exchanges to ensure compliance with their AML and CFT frameworks. Action taken against the biggest exchanges could change the landscape of digital currency trading.crypto casinos are growing more popular and, as such, catching the eye of governing bodies and authorities globally. While crypto gaming has less restrictive features in most areas, India has taken a different approach.
In 2023, India announced its plan to block crypto exchanges and transactions, and January 2024 has already seen a serious crackdown.
India’s Crypto Exchange Crackdown
Some of the biggest crypto exchanges available include Binance, Kraken, Kucoin, and Mexc. All of these have become targets of the Indian Financial Intelligence Unit (FIU). The latter issued several letters to nine different cryptocurrency companies stating they’re violating the anti-money laundering legislation. You’ll find Bittrex, Bitfinex, Gate.io, and Huobi among the nine. Currently, Bitstamp is the only exchange whose apps are still active in Indian App Stores.
Some of the biggest targets of the FIU are, no doubt, Binance, Kraken, Kucoin, and Mexc. Several measures have been taken against them, and now the unit has gone as far as deleting their apps from India’s Apple iStore. This comes after the legislation of new taxation rules on virtual currencies was implemented last year.
The new legislation and the strict crackdown are all done as part of India’s attempt to start regulating cryptocurrencies. With the strict crackdowns, the unit is making it clear that regulatory pressure has been turned up, and no crypto business is exempt.
Taxation Policy
A taxation policy was implemented in 2023. According to the policy, there is to be a 30% tax deduction on earnings via cryptocurrency transactions. And a 1% deduction for each transaction.
Due to these tightening regulations, many crypto dealers have made the move to other global trading platforms to avoid these heavy taxes.
Not one to be blindsided or snuffed, India quickly jumped into action, responding with a restriction on the URLs of these cryptocurrency exchanges. This is one of the major steps in halting activities via these platforms.
The actions taken are all measures that would ensure that these companies and organisations fall in line with the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework as per India’s Prevention of Money Laundering Act (PMLA) of 2002.
Committed to Crypto Regulation
India’s Financial Intelligence Unit is taking drastic action in an effort to show its commitment and determination to regulate the cryptocurrency industry while at the same time adding a layer of protection to its financial system.
To ensure compliance is maintained in the cryptocurrency industry, the Indian government is also focusing on targeting the bigger businesses like Kraken and Binance. The new tax policy has not been received too warmly. As two India-based crypto exchanges, CoinDCX and CoinSwitch, Kuber has warned the government that it may result in customers switching to other decentralised exchanges and services that are uncompliant.
India’s action on this is to crack down on any exchanges and companies that may have this intention. This new stance by India is one to keep a close eye on as it may just influence the stance of other regions as they continue to watch the situation develop.
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