The Play Store’s Ban on Crypto Exchanges
Recently, Google made a significant move by removing several cryptocurrency exchange apps, including prominent ones like Binance and Kraken, from its Play Store in India. This decision, made on Saturday, marks a significant setback for India’s aspirations in the web3 domain, which is already facing challenges. Notably, this action follows accusations that these global crypto exchanges were operating in the South Asian market without legal authorization.
Indian Government’s Scrutiny and Apple’s Similar Action
The Financial Intelligence Unit (FIU) of India, a key agency monitoring financial activities, issued notices last month to nine crypto firms. These notices alleged non-compliance with India’s anti-money laundering regulations. In a parallel development, Apple had already removed these apps earlier in the week. Additionally, telecom networks and internet service providers in India started blocking the URLs of these crypto exchange websites.
Binance’s Response and the Impact on Users
Binance, one of the affected firms, acknowledged the situation, stating that the blockage primarily affects new users trying to access its services in India. They clarified that existing users with the app already installed are not impacted. Binance emphasized its commitment to complying with local laws and engaging with regulators for user protection and fostering a healthy Web3 industry.
India’s Stance on Cryptocurrencies and Regulatory Measures
India’s tough regulatory approach, including a 30% capital gains tax and a 1% transaction levy introduced in 2022, has led many Indian crypto traders to shift to global platforms with more relaxed know-your-customer (KYC) procedures. This shift, coupled with the general downturn in the crypto market, resulted in a drastic decline in trading activity on local exchanges like WazirX.
Despite these challenges, Indian platforms such as CoinSwitch Kuber and CoinDCX maintain stringent KYC norms. The trend of traders moving to international platforms without such strict regulations is seen as a means to avoid taxes.
Ashish Singhal, the co-founder of CoinSwitch, urged offshore exchanges to comply with India’s anti-money laundering and counter-financing of terrorism measures, highlighting the benefits of regulatory oversight for consumer protection.
India’s Historical Approach to Cryptocurrency
India has maintained a tough stance on cryptocurrencies. About five years ago, the Reserve Bank of India imposed a ban on cryptocurrencies, although it was later overturned by the Supreme Court. Despite this, the central bank continues to advocate for a ban on cryptocurrencies, likening them to Ponzi schemes.
The removal of crypto exchange apps by Google and Apple, along with the Indian government’s strict regulatory measures, reflects the country’s ongoing cautious and stringent approach to managing the burgeoning cryptocurrency market.
