The Indian government has recently taken action to block access within the country to several major overseas cryptocurrency exchanges and virtual asset service providers. This includes popular platforms such as Binance, OKX, and Kucoin.

This move comes in response to non-compliance by these companies with notices issued in late December 28 by India’s Financial Intelligence Unit (FIU). The FIU had highlighted concerns over unauthorized operations by these platforms in India and failure to adhere to laws regarding anti-money laundering.

With the deadline for responses now passed, access blocking has begun on the recommendation of the FIU. This bars Indian users from accessing these overseas crypto platforms via their websites or mobile apps.

FIU Issues Notices Over Non-Compliance With Indian Laws

In more detail, on December 28th, the Financial Intelligence Unit issued formal notices to Binance, OKX, Kucoin and five other major global cryptocurrency exchanges.

These notices sought clarification from the companies regarding their continued offering of services to Indian users. Specifically, the FIU outlined apparent non-compliance with provisions under the nation’s laws aimed at preventing money laundering, terrorist financing, and other illegal activities.

The overseas crypto exchanges were provided a window of two weeks to respond to the FIU’s show cause notices. However, with the January 12th deadline now expired, the platforms failed to adequately address the concerns raised.

As a result, the FIU recommended that the Indian government’s IT ministry take action to block access to the web platforms of these non-responsive overseas companies. This would bar Indian investors from accessing them.

Access Blocking Prompts Shift Towards Compliant Platforms

With URLs to these major exchanges now inaccessible within India, digital asset investors in the country are incentivized to shift towards using Indian crypto trading platforms recognized as officially compliant.

Leading domestic industry players have highlighted that this blocking of access to non-compliant foreign platforms helps create a more fair competitive environment. It also fosters greater trust and confidence among Indian users by encouraging a shift towards certified exchanges meeting local regulatory standards.

Some Indian platform operators have also introduced special assistance and incentives aimed at smoothly transitioning investors and their funds away from newly blocked overseas exchanges. They emphasize the critical importance of Indian users keeping their digital asset holdings only on fully compliant crypto exchanges and custodial platforms registered to operate in the country.

This avoids potential issues accessing or managing funds kept on non-compliant foreign platforms in future. It also provides Indian investors much greater legal recourse in case of fraud or other issues arising on domestic exchanges meeting all regulatory requirements. Look at the cred business model to learn more.

Surge in Interest and Sign-Ups for Indian Crypto Exchanges

The latest regulatory scrutiny and access blocking of multiple major overseas virtual asset service providers has coincided with a noticeable surge in interest and new sign-ups for Indian crypto exchanges.

These compliant domestic platforms have seen increasing user bases thanks to greater investor preference for properly licensed Indian operators. New Indian exchange registrations rose sharply in 2022 after significant crypto tax policies and tighter regulations were introduced.

The capacity to now only access certified Indian trading, investment and custodial platforms is also instilling greater confidence in proper security, transparency and consumer protection mechanisms. It encourages sustained growth in broader adoption among retail and institutional digital assets investors in the country.

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