India’s Crypto Market In Limbo: Another Exchange Departs As Regulations Remain Unclear By Benzinga

© Reuters. India Crypto Market in Limbo: Another Exchange Pulls Out as Regulations Remain Unclear

Benzinga - by Murtuza Merchant, Benzinga Staff Writer.

OK withdraws from the Indian market.

What happened: On March 21, OKX issued a directive to its Indian clientele, advising them to liquidate their holdings and close their accounts by April 30.

The company attributed the exit to the challenging regulatory landscape in India.

The news comes almost three months after a compliance ultimatum from India's Financial Intelligence Unit (FIU) to nine international cryptocurrency exchanges. The initial notice from the FIU prompted a request to the Ministry of Electronics and Information Technology to restrict access to the websites of the exchanges involved within a period of fifteen days.

Following the subsequent blocking of its website and app in January, OKX instituted a revamped registration protocol that included strict Know Your Customer (KYC) measures.

Despite these efforts, the exchange's recent communication with its users indicates a definitive cessation of its operations within the country.

India's regulatory environment continues to pose significant challenges for foreign crypto exchanges looking to take advantage of its burgeoning market.

Also read: Can cryptocurrencies escape the ghost of Wall Street? How the 'overnight effect' in traditional markets affects Bitcoin and Ethereum

The absence of explicit regulatory guidelines, coupled with the government's strict stance, complicates the operational landscape of these entities.

Despite nearly four years of deliberations over a potential regulatory framework, the Indian government's reluctance to formally recognize or regulate the nascent crypto sector remains evident.

The imposition of a hefty 30% tax on crypto profits, with no possibility of offsetting losses, and a 1% tax deducted at source (TDS) on every crypto transaction, has forced many established exchanges to relocate their operations.

Recently, India's Finance Minister underlined the government's position by stating that it is impractical to equate cryptocurrencies with traditional fiat currencies, further highlighting the absence of a definitive regulatory framework for the cryptocurrency industry in India.

Read Next: Ethereum Foundation Faces Confidential Investigation Amid Looming ETF Deadline

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© 2024 Benzinga does not provide investment advice. All rights reserved.

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