The Indian crypto market, once a land of opportunity, is facing a regulatory freeze. As authorities tighten their grip, major crypto exchanges are trying to stay afloat, facing limited services, heavy fines, and even exits.
Failed KYC Check
Global giant Binance, a famous name in the crypto world, learned the harsh reality of India’s regulatory environment earlier this year. The Financial Intelligence Unit of India (FIU-IND) accused Binance of operating illegally and failing to comply with KYC (Know Your Customer) norms.
This led to a months-long suspension of services for Indian users, followed by a hefty penalty of $2.25 million for violating the Prevention of Money Laundering Act (PMLA). Binance’s effort to restore trust came in the form of a recent collaboration with Indian authorities to recover $10 million worth of stolen funds. Whether this gesture of kindness is enough to appease the regulators remains to be seen.
Exodus and Practice
While some exchanges like OKX have thrown in the towel, unable to navigate the complex regulatory maze, others like Kucoin have emerged as winners. Kucoin’s success story lies in being India’s first fully compliant crypto exchange.
This success highlights the importance of adapting to the new normal – a market where clear regulatory approval is key to survival. Kraken and Bitfinex, once major players, now face banned services, a stark reminder of the consequences of non-compliance.
Bitget: Can They Avoid The Knockout Punch?
A recent entrant into India’s regulatory ring is Bitget, a popular exchange that faces user restrictions. With their Indian user base unable to fully access the platform, Bitget has promised to navigate the regulatory labyrinth and ensure compliance.
1/ We are aware of the current difficulty in accessing the Bitget platform in India. We are exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements.
– Bitget India🇮🇳 (@BitgetIndia) July 3, 2024
To facilitate seamless service delivery to users in the region, the exchange has made it clear that it is investigating ways to ensure compliance with local practices.
The exchange admitted that users in India are now having trouble accessing the Bitget platform. “We are exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements,” Bitget revealed.
Their success depends on getting a license before the Indian authorities deliver a knockout blow, which could force them out of the lucrative Indian market.
The Future of Crypto in India
India’s stance on cryptocurrency reflects a global trend: the desire to harness the potential of this new asset class while mitigating the risks associated with money laundering and financial instability. The 30% tax imposed on cryptocurrencies shows the government’s attempt to integrate crypto into the mainstream financial system.
While the current regulatory environment may seem harsh to some exchanges, it could pave the way for a mature and responsible crypto market in India in the long run.
Featured image from Euronews, chart from TradingView
