Tech
Google withdraws Binance, other global crypto apps from Indian store
Google on Saturday pulled several cryptocurrency exchanges, including Binance and Kraken, from its Play Store in India, in what is the latest blow to the world’s second-largest internet market. web3 dream already diminishing. The ban comes two weeks after these global cryptocurrency exchanges were reported to have been operating “illegally” in the South Asian market.
The Financial Intelligence Unit (FIU), an Indian government agency that monitors financial transactions, late last month issued show-cause notices to nine cryptocurrency firms alleging they were not compliant with India’s anti-money laundering rules. Apple retired the apps earlier this week and various telecom networks and internet service providers began blocking the URLs of cryptocurrency exchange websites on Thursday evening.
The FIU had asked India’s IT ministry to block the websites of all nine services in India. Other exchanges whose apps have been withdrawn include Huobi, Gate.io, Bittrex and Bitfinex. “We are aware of an IP block impacting several cryptocurrency companies, including Binance. This only impacts users attempting to access the Indian iOS app store or the Binance website from India,” Binance said on Saturday before its Android app was pulled.
“Existing users who already have the Binance app are not affected. We remain committed to complying with local regulations and laws and are committed to maintaining active communication with regulators to ensure the protection of users and the development of a healthy Web3 industry.”
Between India’s burdensome 30% capital gains tax and 1% transaction tax imposed in India in 2022, numerous domestic cryptocurrency traders have migrated to global platforms with less rigorous customer knowledge protocols. This regulatory arbitrage, coupled with a broader crypto winter, it caused a 97% decline in two years in trading activity on WazirX, a popular Indian stock exchange.
The well-funded Indian platforms CoinSwitch Kuber and CoinDCX still require rigorous identification verification. According to tax authorities, defecting traders appear to have evaded such scrutiny on some international competitors, highlighting classic tax avoidance behaviour.
“CoinSwitch and CoinSwitch PRO, as well as many other Indian VDA exchanges, are already compliant with Indian PMLA requirements for VASPs, and there is no reason why offshore exchanges should not do the same, if they wish to do business in India.” Ashish Singhal, co-founder and CEO of CoinSwitch, wrote on X earlier this week. “Offshore exchanges should actively consider registering with FIU-IND and complying with India’s AML and CFT measures. This is also better for consumer protection in India as there will be greater regulatory oversight of the ecosystem.”
India has historically taken a tough stance on cryptocurrencies and the companies that enable trading in them. The Reserve Bank of India banned cryptocurrencies in the country about five years ago. Although this ban was eventually struck down by India’s Supreme Court, the central bank has since continued to support a ban on cryptocurrencies, and its top officials have compared virtual digital assets to a Ponzi scheme.