On 13th January, in a significant development, Google followed Apple’s lead in removing several major cryptocurrency exchange apps, including Binance and Kraken, from the Play Store. The tech giant has taken the step following a crackdown on the crypto industry in India. Notably, the Government of India took a series of regulatory measures targeting the cryptocurrency sector.
In December 2023, the Financial Intelligence Unit (FIU), a key Indian government agency overseeing financial transactions, issued a show-cause notice to nine crypto firms. The FIU accused these firms of non-compliance with the anti-money laundering regulations in India. Later, the FIU asked the Ministry of Communication to block the apps and websites linked to these firms. On 10th January, Apple removed these apps from the App Store, and several telecom networks and ISPs blocked the websites of these exchanges.
FIU’s request to block nine services, including Binance, Kraken Huobi, Gate.io, Bittrex, and Bitfinex, underscores the GoI’s intent to regular the crypto sector aggressively. In response to the ban, Binance assured the users in India and the existing app installations would not be affected by the move by Google. The company emphasised its commitment to follow the local regulations.
It is noteworthy that the government of India has a strict stance when it comes to cryptocurrencies. Around five years ago, the Reserve Bank of India banned cryptocurrencies. However, the ban was overturned by the Supreme Court. Since then, government agencies have consistently pushed for strict laws to ensure cryptocurrencies are not used for anti-India activities.
In 2022, the GoI imposed a 30 per cent capital gains tax and a 1 per cent transaction levy on cryptocurrency transactions. The government’s steps have resulted in migrating Indian crypto traders to global platforms that require lesser know-your-customer (KYC) documentation. Over two years, WazirX, a leading Indian exchange, has reported a 97 per cent decline in trade on the platform.
Other Indian platforms, including CoinSwitch Kuber and CoinDCX, have enforced strict KYC protocols adhering to Indian regulations. Conversely, traders moving to lesser-regulated international platforms show a trend of avoiding tax payments. CoinSwitch’s co-founder Ashish Singhal recently called for foreign exchanges to register with FUI-IND and adhere to India’s anti-money laundering (AML) and countering the financing of terrorism (CFT) measures for better protection of the consumers in India.
The Indian government has shown a rigorous approach towards the crypto trade, which is in sync with the governments worldwide seeking strict control over digital currencies. As Google and Apple have complied with the Indian authorities’ directive to remove the apps, it shows that pressure on the crypto sector to comply with local laws is increasing.
Notably, there are reports that the cryptocurrencies are being used for money laundering and terror funding, which has raised concerns among the authorities. A few months back, OpIndia reported that ISIS was using cryptocurrency to seek funding for terror activities. Finance Minister Nirmala Sitharaman also warned against such usage on multiple occasions.