Google has taken a decisive step in India, removing several crypto exchanges, including Binance and Kraken, from its Play Store. This move, while not entirely unexpected, serves as another blow to an already dwindling crypto exchange market in the country.
The action was taken only two weeks after these global firms were flagged for operating “illegally” in India. The Financial Intelligence Unit (FIU), a government agency that monitors financial transactions, issued show cause notices to nine crypto companies last month. The agency accused them of not complying with India’s anti-money laundering rules.
Apple had already removed the offending apps from the App Store earlier in the week, and on Thursday night, internet service providers in India began blocking the URLs of the affected exchange websites.
The FIU had also requested the Indian IT Ministry to block the websites of all nine companies. Other exchanges impacted by the ban include Huobi, Gate.io, Bittrex, and Bitfinex.
Binance responded to the situation, stating, “We are aware of the IP block affecting a number of crypto firms, including Binance. This only impacts users attempting to access the Indian iOS app store or the Binance website from India.”
The exchange clarified that existing users who already have the Binance app will not be affected. They also reaffirmed their commitment to adhering to local regulations and laws, as well as maintaining open communication with regulators in order to protect users and promote a thriving Web3 industry.
In recent quarters, many Indian traders have turned to global cryptocurrency platforms, likely to evade taxes. Virtual currencies were taxed in India for the first time last year, with a 30% tax on gains and a 1% deduction on each transaction. CoinSwitch Kuber, backed by Andreessen Horowitz, CoinDCX, backed by B Capital, and former Binance partner WazirX are some of the India-based crypto exchanges that still require strict know-your-customer verifications for new users. However, this is not the case for many global platforms. (WazirX’s trading volume has plummeted by a staggering 97% over the last two years, as many traders have shifted to global apps.)
CoinSwitch co-founder and CEO Ashish Singhal wrote earlier this week, “CoinSwitch and CoinSwitch PRO, as well as several other Indian VDA exchanges, are already compliant with India’s PMLA requirements for VASPs, and there is no reason why offshore exchanges shouldn’t do the same, should they wish to do business in India.”
Singhal continued, “Offshore exchanges should actively consider registering with the FIU-IND and comply with India’s AML and CFT measures. This is also better for consumer protection in India since there will be greater regulatory oversight of the ecosystem.”
CoinDCX and CoinSwitch Kuber had previously warned the New Delhi government that their new taxation policy on crypto could lead many users to turn to decentralized exchanges or seek out non-compliant services. On Tuesday, CoinDCX announced that they would offer rewards to customers who transfer their crypto assets from global exchanges to their India-based platform.
India has historically taken a tough stance on cryptocurrencies and companies involved in their trading. About five years ago, the Reserve Bank of India banned cryptocurrencies in the country. While the ban was eventually overturned by India’s Supreme Court, the central bank continues to advocate for outlawing crypto, with top officials even comparing it to a Ponzi scheme.
Popular global exchange Coinbase also halted new customer onboarding in India last year. In 2022, Coinbase CEO Brian Armstrong claimed that the firm had faced “informal pressure” from the central bank in India.
