OKX Leaves India Due To Regulatory Uncertainty

While India advocates international cooperation in crypto regulation, the domestic regulatory landscape remains uncertain, prompting exchange platforms like OKX to cease operations in the country.

OKX withdraws from the Indian market in the face of regulatory uncertainty

The crypto exchange OKX recently announced the termination of its services in India, because of persistent regulatory obstacles. This decision follows a series of measures taken by local regulators against foreign platforms, including the blocking of the website and application of OKX last January.

Despite OKX initial wishes to comply with regulatory requirements, including participation in a new registration process with rigorous know-your-customer (KYC) checks; the platform eventually decided to cease operations in the country.

In the email sent by OKX, its Indian users were invited to close their positions and withdraw their funds by April 30 to avoid potential losses.

India struggles to define a clear regulatory framework for cryptos

OKX‘s withdrawal from the Indian market highlights the difficulties faced by foreign platforms in navigating the country’s complex and often opaque regulatory landscape.

Despite ongoing discussions for nearly four years, the Indian government has yet to define a formal framework for the crypto market, leaving companies in the sector uncertain about their legal status and obligations.

What’s more, India’s tax regime imposes a heavy toll on crypto-related revenues, with a 30% tax with no possibility of offsetting losses, as well as a 1% withholding tax on each transaction. These strict tax regulations have prompted several major players to relocate their activities to more favorable jurisdictions.

India calls for international cooperation, but struggles to clarify its regulations

Faced with the challenges posed by the decentralized nature of cryptocurrencies, India’s Finance Minister, Nirmala Sitharaman, had stressed the need for international cooperation to address their regulation.

However, while India is showing a willingness to cooperate on the international stage, the situation at home remains worrying. The Financial Intelligence Unit (FIU) of the Indian Ministry of Finance issued notices to several exchanges, including Binance, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex and Huobi, for non-compliance with the Prevention of Money Laundering Act. Shortly afterwards, the applications of several platforms were withdrawn from the App Store and Google Play in India.

All these factors underline the urgent need for India to develop a clear, coherent and transparent regulatory framework for the crypto sector. By striking the right balance between protecting investors and promoting innovation, the country could capitalize on the potential of digital assets while mitigating the associated risks.