Coin Edition -
- OKX exits India due to regulatory challenges and sets a fund withdrawal deadline for April 30.
- The absence of clear crypto regulations in India stifles market growth despite its potential.
- Heavy taxation on crypto transactions drives major exchanges to relocate.
OKX, a leading cryptocurrency exchange, announced the closure of its Indian operations, allowing customers to withdraw their funds from the exchange until the 30th of April. This decision comes after compliance notices from the Financial Intelligence Unit (FIU) of the Indian Ministry of Finance to nine foreign crypto exchanges, including OKX, nearly three months ago.
The exchange attributes its exit to the considerable regulatory obstacles present in the country. Following the FIU’s notices, efforts were made to block the websites of the affected exchanges, leading to the inaccessibility of OKX’s website and application since January.
Despite introducing a new registration process featuring stringent Know Your Customer (KYC) checks, OKX has opted to cease operations in the Indian market. The country’s stance towards cryptocurrency regulation has been a major point of contention.
The market, although dynamic and exciting, is complicated for foreign crypto exchanges because the legal framework remains unclear, and the government applies strict measures. Specifically, the topic of regulating cryptocurrencies has been debated for almost four years with little to no progress at all.
FM Nirmala Sitharaman latest statement on Crypto regulation.$OpSec #zerodha #WazirX pic.twitter.com/sUaoSIIg4t— Jackson Chakma (@jackck_8) March 15, 2024
The Indian government’s approach has been cautious, with the Finance Minister recently reiterating the distinct treatment of cryptocurrencies compared to traditional fiat currencies. However, the crypto community has sought clarity similar to that provided for the traditional stock market, emphasizing the need for regulatory guidelines rather than equivalence with national fiat currencies.
This lack of a definitive regulatory structure has led to the imposition of a heavy tax burden on crypto transactions. This includes a 30% tax on crypto income and a 1% tax deducted at source (TDS) for each transaction, compelling several major players to move their operations elsewhere.
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