It seems that the troubling days for the crypto industry are far from over, as Google has now followed Apple's lead in removing several cryptocurrency exchange apps, including Binance and Kraken, from its Play Store in India.
The move comes in the wake of the Indian Finance Ministry's Financial Intelligence Unit (FIU) issuing show-cause notices to these exchanges for unauthorized operations in India.
What's the issue with these crypto platforms?
As per the reports, The FIU's action is rooted in concerns over violations of India's anti-money laundering regulations. The agency has specifically targeted nine offshore crypto exchanges and recently requested the Ministry of Electronics and Information Technology (MeitY) to block their URLs within India.
The notice also reflects India's stringent regulatory approach towards cryptocurrencies, a stance that has seen fluctuations over the years, including a ban by the Reserve Bank of India that was later overturned by the Supreme Court a few years ago.
What will be the impact on the Indian crypto market?
The Indian crypto industry has already been grappling with regulatory issues, and the removal of these apps from major digital platforms will only cause more harm to the industry.
Amidst a regulatory environment that includes a 30% capital gains tax and a 1% transaction levy on cryptocurrencies, the crackdown has further dampened the country's web3 aspirations.
At the heart of this issue is compliance with India's anti-money laundering rules. While Indian crypto exchanges like CoinSwitch Kuber and CoinDCX have adhered to strict identification verification processes, their offshore counterparts have been flagged for non-compliance.
This has led to a situation where domestic traders seeking less stringent platforms have moved to these global platforms, highlighting a case of regulatory arbitrage and potential tax avoidance.
The recent steps taken by tech giants like Google and Apple, in response to the Indian government's directives, underscore the precarious position of cryptocurrency trading in India.
The enforcement actions against offshore exchanges for non-compliance with AML and CFT regulations indicate a clear message from the Indian authorities. For the crypto market in India to thrive, adherence to regulatory norms and consumer protection measures is paramount.