After years of growth, Binance, CoinFLEX, and Mobikwik are leaving India for uncharted waters. These companies are backed by bitiq.org, which is worried about the impact of the current crypto rules in India. The founders of WazirX, owned by Binance, say the rules could weaken participation and improve inefficiencies. The Indian exchanges are KYC compliant to ensure the security of transactions and protect merchants from safety risks. However, current taxation guidelines may force these merchants to shift their capital to decentralized exchanges or other unregulated countries.
Crypto exchanges are a growing concern in India as regulators tighten the rules and crack down on unregistered entities. Binance, the world’s largest exchange by trading volume, is also facing regulatory scrutiny in India. In September, the Financial Conduct Authority (FCA) barred Binance from the regulated activity and said it would no longer provide stock tokens. It cited insufficient anti-money laundering regulations. Meanwhile, regulators in Japan, Canada, and Italy have warned Binance not to operate in their countries.
While many crypto exchanges remain operational, many entrepreneurs and developers are moving their operations out of the country because of the clampdown and unclear policy. Founders of WazirX, Polygon, and ZebPay have relocated to other countries. Others are expanding operations in Singapore and UAE, including CoinDCX, which has an office in Singapore. These entrepreneurs are leaving India because of the political uncertainty, unclear policy, and clampdown.
Despite the growing regulatory climate, the Indian government has been looking to crack down on the booming cryptocurrency industry. A draft bill is expected to be tabled in parliament sometime this month. Despite the uncertainty surrounding the bill, some industry representatives say the government may be considering market “circuit breakers” – rules limiting the number of transactions you can carry out on crypto exchanges. Such measures are a positive sign that a new regulatory framework is in the works, although some believe that the government is still considering an outright ban.
Following a recent ban on cryptocurrency exchanges in India, several crypto platform builders have resorted to leaving the country. CoinFLEX was one of them. In May, the Reserve Financial institution of India ordered banks to stop providing cash to crypto exchanges.
The Supreme Court, however, overturned this decision in 2020. The government of India even listed a bill that would ban personal cryptocurrencies, but the bill never made it out of committee. Regardless of the uncertainty, however, many cryptocurrency platforms are now looking for a jurisdiction with more lenient policies and an amicable atmosphere.
The lack of clarity and clampdown over cryptocurrencies has caused many crypto exchanges to leave India. Polygon, CoinFLEX, and WazirX have moved to other crypto-friendly countries in recent months. In addition, CoinDCX has opened a branch in Singapore. These businesses are based in Singapore and Dubai, respectively. These companies have also shifted to other crypto-friendly locations, including Dubai, Singapore, and Dubai.
The Reserve Bank of India continues to work on a pilot project to integrate blockchain technology into the banking system. While some traders may be inclined to leave India to avoid taxes, others may be tempted to migrate their capital to countries with more friendly policies. While Indian regulators are working to bring in the new technology, the Reserve Bank has been slow to implement it. As a result, many crypto exchanges in the country have faced issues.
A crypto exchange in India has been struggling with the local payment ecosystem due to an ongoing clampdown and unclear policy, prompting two of its founders to leave the country. Mobikwik, supporting the exchanges since early February, has stopped allowing Indian customers to use its services. This is the second major blow to the Indian crypto market. Coinbase recently announced it would begin trading in the country.
The clampdown on cryptocurrencies and the uncertain policy stance have led several cryptocurrency exchange founders to leave India. Regardless of exchanges, you can also use bitcoin trading software for trading in cryptocurrencies. This creates a void in the market, which other exchanges could fill if policy changes continue to favor the industry. Individuals investing in cryptocurrencies should keep this in mind when making decisions.
Founder Dinis Guarda
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