Google has removed several prominent global crypto exchanges, including Binance and Kraken, from its Play Store in India. This move comes as a response to allegations of these exchanges operating “illegally”, with the Financial Intelligence Unit (FIU) issuing show cause notices to nine crypto firms.
Late last month, the FIU raised concerns about the non-compliance of these firms with India’s anti-money laundering rules. Subsequently, Apple also pulled their apps, and various telecom networks and internet service providers began blocking the URLs of the affected crypto exchange websites.
India Blocks Offshore Crypto Exchanges
The list of impacted crypto exchanges includes Huobi, Gate.io, Bittrex, and Bitfinex. Binance, a prominent player in the crypto space, acknowledged the situation, stating that the IP block only affects users attempting to access the Indian iOS app store or the Binance website from India. However, existing users with the Binance app are not impacted.
The company emphasized its commitment to adhering to local regulations and laws, pledging ongoing communication with regulators to ensure user protection and the healthy development of the Web3 industry.
This move by Google follows India’s imposition of a 30% capital gains tax and 1% transaction levy in 2022, prompting domestic cryptocurrency traders to migrate to global platforms with less stringent know-your-customer protocols.
This regulatory arbitrage, combined with a broader crypto downturn, has led to a massive decline in the trading volumes of local exchanges. It was estimated that around three to five million customers shifted from local to offshore exchanges after the implementation of 1% TDS.
The local crypto community is calling for regulations from the Indian government, but the picture remains uncertain. As reported earlier, the governor of the Reserve Bank of India said that their position on cryptocurrency remains unchanged and they see it as a problem that can disbalance emerging markets like India.
