OKX, a cryptocurrency exchange, has communicated via email with its user base in India about the cessation of its services in the country, urging them to withdraw their funds by the end of April.
OKX Halts Operations in India In a notice dispatched to Indian users on March 21, OKX advised its clientele to finalize their accounts and retrieve funds before April 30. The decision was prompted by regulatory challenges within the Indian market, with OKX citing local regulatory barriers as the primary impetus behind the move. The notice regretfully stated, “We regret to inform you that OKX is no longer providing services to users in India.”
Consequently, OKX users in India were directed to close all active positions, including margin positions, perpetuals, futures, and options, and withdraw funds from products like Earn, Loan, and Jumpstart by the midnight deadline on April 30. Additionally, OKX emphasized the importance of promptly withdrawing funds to mitigate potential losses before the specified deadline. The exchange reassured users that their funds would remain secure and accessible until fully withdrawn. This decision followed a directive from the Financial Intelligence Unit (FIU) requesting the Ministry of Electronics and Information Technology to block the websites of notified crypto exchanges within a fortnight; OKX had faced website and application blocks in January.
Despite making efforts to comply by initiating a new registration process involving rigorous Know Your Customer (KYC) checks following website and application blocks in January, OKX’s notice indicates that the registration process could not be successfully completed.
On December 28, 2023, the Financial Intelligence Unit (FIU) of India’s Ministry of Finance issued compliance notices to several cryptocurrency exchanges, including Binance, Huobi, Kraken, and others, for allegedly operating unlawfully within the country.
Regulatory Ambiguity Continues to Plague Cryptocurrency Exchanges in India Cryptocurrency exchanges in India continue to grapple with regulatory ambiguity, exacerbated by stringent government actions and the absence of clear regulatory guidelines. Despite ongoing discussions spanning nearly four years, the Indian government has yet to establish a formal regulatory framework for the burgeoning crypto market, leaving industry participants uncertain about their legal status and obligations within the country. Additionally, the Indian tax regime imposes a hefty 30% tax on crypto income without provisions for offsetting losses, alongside a 1% tax deducted at source (TDS) on each crypto transaction. These stringent tax regulations have prompted several established players to relocate their operations elsewhere, further complicating the regulatory landscape for cryptocurrency exchanges operating in India.