OKX cryptocurrency exchange is set to shut down its services in India, following compliance notices issued by the Financial Intelligence Unit (FIU) of the Indian Ministry of Finance to nine foreign crypto exchanges. Users were notified on March 21 to close their accounts and withdraw funds by April 30, with local regulatory obstacles cited as the primary reason for the decision.
The FIU requested the Ministry of Electronics and Information Technology to block the websites of the notified crypto exchanges within two weeks of the notice. OKX had previously faced website and application blocks in January, leading to the implementation of a new registration process with stringent Know Your Customer checks. However, the exchange’s notice to users indicates that it will no longer operate in India.
India presents challenges for foreign crypto exchanges due to the absence of clear regulatory guidelines and stringent government actions, despite being a flourishing market. Although discussions surrounding a regulatory framework have been ongoing for almost four years, the Indian government has shown no indication of recognizing or subjecting the emerging crypto market to legal oversight.
The absence of a timeline for formal crypto regulations in India, combined with the imposition of a substantial 30% tax on crypto income without any provision to offset losses, as well as a 1% tax deducted at source on each crypto transaction, has prompted numerous established players to relocate their operations elsewhere.
In a recent interview, the Indian Finance Minister acknowledged that crypto cannot be treated in the same way as traditional currencies, which is why the government has yet to establish a clear regulatory structure. However, this response is not unique to the Indian government and fails to address the request from market participants for clearer regulations, similar to those in the traditional stock market.
Cointelegraph has reached out to OKX for comment, but as of now, there has been no response.