Google has removed several crypto exchanges, including Binance and Kraken, from its Play Store in India. This move deals a big blow to the country’s web3 dream and comes after these global crypto exchanges were flagged for operating “illegally” in India.
The ban follows show cause notices issued by the Financial Intelligence Unit (FIU), an Indian government agency that oversees financial transactions, to nine crypto firms. Apple has also removed the apps, and various telecom networks and internet service providers have started blocking the URLs of the crypto exchange websites.
The FIU requested India’s IT Ministry to block the websites of the nine services in India. The Android app of Binance was pulled after the company stated that it was aware of an IP block affecting several crypto firms in India.
India’s 30% capital gains tax and 1% transaction levy, along with strict know-your-customer protocols, have led many domestic cryptocurrency traders to switch to global platforms. A 97% two-year decline in trading activity on WazirX, a popular Indian exchange, has been attributed to this regulatory arbitrage and the broader crypto downturn.
Well-funded Indian platforms CoinSwitch Kuber and CoinDCX still require rigorous identification verification. However, some traders have avoided this scrutiny on international competitors, leading to concerns from fiscal authorities about tax avoidance behavior.
Ashish Singhal, co-founder and chief executive of CoinSwitch, called for offshore exchanges to comply with India’s AML and CFT measures, emphasizing the importance of consumer protection and regulatory oversight of the ecosystem.
India has historically taken a tough stance on cryptocurrencies and the companies that enable their trading. The Reserve Bank of India implemented a ban on cryptocurrencies about five years ago, although this ban was eventually struck down by India’s Supreme Court. Despite this, the central bank continues to advocate for outlawing crypto, likening virtual digital assets to a Ponzi scheme.
