Indian crypto exchanges and investment platforms such as CoinDCX and Mudrex have reported a significant surge in deposits and new user onboarding following the issuance of compliance show cause notices to foreign exchanges including Binance and eight others, by the Financial Intelligence Unit India (FIU IND).
CoinDCX said that in less than a week of the notice being issued, it has witnessed a jump of 2,000% in crypto deposits. Meanwhile, Mudrex clocked in deposits worth over $1 million and added 10,000 new users to its platform.
On December 28, Virtual Digital Assets (VDAs) service providers, including Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex received show cause notices in a crackdown attempt from FIU IND under the Prevention of Money Laundering Act (PMLA) for not complying with the local money laundering laws. Their URLs too were asked to be blocked.
In an earlier interaction with Moneycontrol, citing a recent study done by ESYA centre, Sumit Gupta, co-founder and CEO of CoinDCX had shared that 3-5 million Indians and more than 90 percent of the traffic from exchanges have shifted to offshore exchanges following the implementation of 30 percent tax on crypto income and 1 percent TDS charged on every transaction above Rs 10,000 by the Indian government.
"Given the circumstances, it concerns us that these users are trading on platforms that are not registered in India and do not follow the laws of the land, especially concerning the PMLA guidelines," he told Moneycontrol.
Following the current surge in crypto deposits, Gupta said, “We continue to stand by Indian investors, providing the best possible support in the current scenario. We have streamlined the process of crypto deposits, ensuring a seamless transfer experience from other platforms. Additionally, we are introducing incentives and delivering support to users who want to migrate their assets to CoinDCX..”
Edul Patel, CEO and co-founder of Mudrex said, “Indian investors should always aim to have their assets in FIU-compliant entities as it gives them a localized experience and more importantly a way for legal recourse against fraudulent activity on their account.”
“At Mudrex, we have created a seamless flow for users to transfer their funds from other exchanges adhering to the highest safety and compliance standards,” Patel added.
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