In a significant development, Apple has removed some of the world's leading cryptocurrency exchanges, including Binance and Kucoin, from its App Store in India. This action follows the Indian government's issuance of show-cause notices to these exchanges for alleged non-compliance with money laundering laws and illegal operations within the country.
The Financial Intelligence Unit (FIU), under the Finance Ministry, had last month issued these notices to nine offshore virtual digital asset service providers, including Binance. The exchanges were accused of operating in India without adhering to the country's money laundering laws. Apple, however, has not yet commented on the removal of these crypto exchanges from its App Store. Interestingly, these apps continue to be available on Google's Play Store.
The Finance Ministry had also requested the IT Ministry to block the URLs of these crypto companies, citing their illegal operations in the country. Binance, one of the world's largest crypto exchanges, is already under scrutiny in the US after pleading guilty to breaking anti-money laundering laws.
Binance's Chief Steps Down Amid Global Regulatory Pressure
Binance's chief, Changpeng Zhao, had to step down as part of a multi-billion dollar settlement following an investigation into the exchange's operations. The Finance Ministry has stated that both offshore and onshore Virtual Digital Asset service providers operating in India must register with the Financial Intelligence Unit-India. They must also comply with the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
These provisions apply to activities including the exchange between virtual digital assets and fiat currencies, the transfer and administration of virtual digital assets, or instruments enabling control over them. In a similar vein, Apple's App Store in India has blocked other crypto exchange apps, including Bitget, Huobi, OKX, Gate.io, and MEXC, weeks after the Indian government issued a noncompliance notice against nearly a dozen offshore crypto exchanges.
Global Trend of Tightening Regulations on Cryptocurrencies
These exchange applications are no longer accessible to new users in India. This is not the first time that the Indian government has taken a hard stance against cryptocurrency. In the past, local exchanges have complained about a 1% levy, known as Tax Deducted at Source, which they claim has driven Indian crypto traders to offshore platforms that do not impose it, further hurting their revenues.
The current situation has led to a significant drop in trading volume on some platforms. For instance, trading volume on WazirX has reportedly plunged by 97% in two years, partially due to many traders opting for global apps. The crackdown on crypto exchanges is not limited to India. In the US, Binance founder Changpeng Zhao's request to travel abroad was denied by a US Judge after prosecutors argued that Zhao was a flight risk.
The Indian government's clampdown on offshore crypto venues like Binance is part of a broader global trend. Governments worldwide are becoming increasingly concerned about the potential for money laundering and other illegal activities through cryptocurrencies. As a result, they are tightening regulations and increasing scrutiny of crypto exchanges.
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