Indian Finance Ministry issues show cause notice to crypto exchanges
In the last few days of December 2023, the Indian Finance Ministry’s Financial Intelligence Unit (FIU) issued a show cause notice to nine offshore cryptocurrency exchanges, including Binance and Kraken, alleging that the exchanges had been engaging in unauthorized operations in India. The show cause notice was issued under Section 13 of the Prevention of Money Laundering Act (PMLA) of 2002, which requires virtual digital asset service providers (VDA SPs) to register with FIU India and comply with the specified requirements outlined in the act.
Google removes crypto exchange apps from Play Store in India
Following the show cause notice issued by the FIU, Google has removed a number of cryptocurrency exchange apps from the Play Store in India. The move comes as part of the company’s efforts to comply with regulatory requirements and ensure that only authorized entities are operating in the Indian market. This action by Google comes after a similar move by Apple, which also removed the banned crypto apps from its App Store in India last week.
Apple also bans crypto apps from App Store in India
In addition to Google, Apple has also taken action to remove cryptocurrency exchange apps from its App Store in India. The apps that have been banned include those mentioned in the FIU’s show cause notice, such as Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfenex. This move by Apple is in line with its commitment to adhere to regulatory requirements and ensure that only authorized entities are allowed to operate in the country.
FIU asks MeitY to block URLs of nine crypto exchanges
The Financial Intelligence Unit (FIU) has requested the Ministry of Electronics and Information Technology (MeitY) to block the URLs of nine cryptocurrency exchanges within India. This action is a response to the suspected violations of Indian anti-money laundering regulations by the mentioned exchanges. By blocking the URLs, the FIU aims to prevent Indian users from accessing these exchanges and engaging in unauthorized activities. It is a part of the government’s efforts to curb money laundering and illicit financial transactions in the cryptocurrency sector.
Foreign crypto exchanges operating illegally in India, says FIU
The FIU has stated that several foreign virtual digital asset service providers (VDA SPs) have been operating illegally in India by evading registration with FIU India. These entities, despite catering to a substantial user base in India, have been operating beyond the scope of the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework. The FIU has emphasized the importance of compliance with the specified requirements outlined in the Prevention of Money Laundering Act (PMLA) of 2002 for all VDA SPs, whether they operate within India or beyond its borders. So far, 31 VDA SPs have successfully registered with FIU India, but the FIU aims to crack down on those that are operating illegally in the country.
Overall, these recent developments highlight the Indian government’s efforts to regulate the cryptocurrency sector and ensure compliance with anti-money laundering regulations. By issuing show cause notices, requesting URL blocks, and taking action against unauthorized crypto exchange apps, the government aims to protect Indian users and prevent illicit financial activities in the cryptocurrency space.
Analyst comment
Positive news: The Indian Finance Ministry’s show cause notice and actions taken by Google and Apple to remove unauthorized cryptocurrency exchange apps demonstrate the government’s commitment to regulating the sector and curbing illicit financial activities.
Short analysis: The market is likely to see increased scrutiny and regulation of cryptocurrency exchanges in India, with stricter compliance requirements and enforcement measures being implemented. This could lead to a more transparent and secure environment for investors, while unauthorized entities may face restrictions or penalties.