Apple has removed offshore crypto exchanges such as Binance, Kucoin and OKX from its App Store after a show-cause notice was sent to nine such virtual digital asset (VDAs) service-providers by the finance ministry for not complying with the country's money laundering laws.
The show-cause notice was sent on December 28 to Binance, Kucoin, Houbi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex for operating illegally in India by not registering and following local tax rules. The finance ministry had directed the information technology ministry to block the URLs.
A source in the know told Moneycontrol that app stores received blocking orders around 10 days back.
Apple could not be immediately reached for a comment. These apps, however, continue to show on Google’s Play Store at the time of publishing this article.
How it unfolded
The offshore exchanges not being registered in India came into light when a query was raised in the Lok Sabha in the first week of December. In response, the finance ministry had put out a list of 28 crypto and VDA services platforms that are registered with the Financial Intelligence Unit-India (FIU-IND) and followed the anti-money laundering and countering the financing of terrorism (CFT) guidelines under PMLA.
Following this, offshore platforms like Binance, Coinbase and others were asked to get registered to continue operations in the country. Then on December 28, the finance ministry issued show-cause notices.
Crypto investors from India have been flocking to off shore exchanges over the past couple of years to evade paying 30 percent taxes on income and gains from virtual digital assets (VDAs) and pay 1 percent TDS on every buy and sell transaction of over Rs 10,000.
CoinDCX co-founder Sumit Gupta had earlier told Moneycontrol that over 90 percent of crypto platform traffic from India, in the past couple of years, went to offshore exchanges.
Crypto platforms react
Binance notified users on X, that they are aware of the new changes and existing app users' funds will be safe.
"We are aware of new changes that have been introduced regarding crypto exchanges on the iOS App Store in India, impacting the Binance App. The ongoing situation is not unique to #Binance and we remain committed to complying with local regulations and maintaining dialogue with regulators worldwide to ensure the continued availability of our services," Binance said on X.
The post added, "Please note that existing app users will not be impacted. We will continue to work with regulators to resolve the situation and will share updates here."
To attract stranded users of the offshore platforms, Gupta took to X (formerly Twitter) to share that CoinDCX has started a $1-million Treasury Fund, through which it will offer 1 percent bonus to users depositing their VDA between January 9 and 18, 2024, with the platform.
"By asking offshore exchanges to register with the FIU-IND, the idea is to increase compliance with Indian laws on taxation, the Prevention of Money Laundering Act (PMLA), and KYC norms," Ashish Singhal, Co-founder and Group CEO, PeepalCo & CoinSwitch wrote on X.
Singhal added, "This will help: a) create a level playing field between Indian & offshore exchanges, b) fortify compliance guardrails, and c) enhance consumer protection."
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