OKX exits Indian crypto space failing to meet legal requirements

India has tightened the noose around cryptocurrency-related activities, requiring companies in the sector to comply with certain legal requirements. By not respecting these rules, OKX cryptocurrency exchange has decided to exit the crypto sphere of India. The Seychelles-based exchange informed its Indian community on March 21 that it would have to close their accounts on the platform before April 30. OKX entered the Indian market between August and November last year. The company has been in business since 2017 and was founded by Star Xu.

The OKX team has issued a notice to the Indian community stating that the exchange no longer provides services in India.

“Due to local regulations, it is necessary to close all margin positions, as well as positions in perpetuals, features and options. Redeem all funds from Grow products,” the exchange said in its notice.

Starting April 30, accounts held by India-based individuals on OKX will be restricted. While they will still be able to withdraw funds, all other features will be disabled.

“Your funds will remain safe and available in your account until you withdraw them,” the exchange noted.

It is currently unclear whether OKX’s exit from the Indian crypto space will be temporary until the company complies with the rules or whether it is making a long-term exit. Indian financial authorities, in order to make the cryptocurrency industry safe and allow people to interact, are adding layers of regulations that industry operators must comply with.

In December 2023, the Financial Intelligence Unit India (FIU) released show cause notices to nine offshore companies asking them to prove that they were following all the rules of India. These companies are: Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.

The FIU and the Indian Finance Ministry are trying to ensure that all cryptocurrency related businesses follow the Anti-Money Laundering and Countering the Financing of Terrorism (AML-CFT) framework as per the provisions of the Prevention of Money Laundering (PML) Act in March 2023. Soon after the announcement, the Binance and Kraken apps disappeared from the Apple App Store and Google Play Store in India.

In the times to come, India is expected to implement multiple layers of rules on the cryptocurrency sector following the regulatory roadmap finalized by the G20 group last year.

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