The once promising Indian cryptocurrency market is now facing increased regulatory scrutiny. As authorities tighten regulations, leading cryptocurrency exchanges are struggling to operate smoothly, dealing with limited services, substantial fines, and potential closures.
Challenges with KYC Compliance
Popular global exchange Binance found itself in hot water earlier this year in India. The Financial Intelligence Unit of India (FIU-IND) accused Binance of operating illegally and not complying with KYC (Know Your Customer) regulations.
As a result, Binance faced months of service suspension for Indian users and a hefty $2.25 million penalty for violating the Prevention of Money Laundering Act (PMLA). Despite efforts to rebuild trust through collaboration with Indian authorities to recover stolen funds, the extent of their acceptance by regulators remains uncertain.
Adaptation and Departure
While some exchanges like OKX opted to exit the market due to regulatory challenges, others such as Kucoin managed to thrive. Kucoin’s success stems from becoming India’s first fully compliant cryptocurrency exchange.
This success underscores the importance of adapting to regulatory requirements in the evolving market landscape. Former key players like Kraken and Bitfinex now face service limitations, serving as a reminder of the repercussions of non-compliance.
Bitget’s Compliance Efforts
Bitget, a well-known exchange, is the latest to face regulatory hurdles in India, leading to user restrictions. Despite the challenges, Bitget has committed to navigating regulatory complexities and ensuring adherence to guidelines.
In response to user difficulties in India, Bitget expressed active efforts to explore solutions that align with local compliance standards, aiming to deliver uninterrupted service.
Bitget’s ability to secure licensing before potential regulatory actions could determine its future in the competitive Indian market.
The Evolving Crypto Landscape in India
India’s approach to cryptocurrencies mirrors a global trend of harnessing the opportunities presented by this asset class while addressing concerns about illicit activities and financial volatility. The imposition of a 30% tax on crypto income illustrates the government’s push to integrate cryptocurrencies into the traditional financial system.
Although the current regulatory environment poses challenges for exchanges, it could lead to the development of a more stable and accountable cryptocurrency market in India in the long term.
Featured image from Euronews, chart from TradingView
