Shadow Ban on Crypto Exchanges

[pawanjain]

I was wondering why nobody has made a post about it yet and so I did it myself.

The government of India has announced a shadow ban on crypto exchanges including popular exchanges like Binance, Huobi, Kraken etc...
All of these exchanges were not adhering to AML regulations in India and so the government has announced that they will block the URLs to these websites soon.
Although they have not mentioned the timeline before start restricting user access to these sites but they have become strict with their AML laws now.

They had already made a written declaration earlier this month about the AML regulations after which many domestic exchanges registered themselves with the Financial Intelligence Unit (FIU).

My thoughts: The elections are near. Crypto is booming. Government wants to get their hands on it too 

Source: https://www.coindesk.com/policy/2023/12/28/india-issues-compliance-show-cause-notices-to-9-offshore-exchanges-including-binance-and-kucoin/

[1714251251]

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[1714251251]

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[kentrolla]

We can never trust Indian government as it's acting really sadistic way, to be honest every single policy they have when it comes to crypto are really harsh they don't directly ban crypto but literally kill it with stupid policies. Indian government just want it's population to stay poor  and wants their cut even before they earn and moreover we have seen Indian exchanges dying. a slow death, and if they keep scrutinizing crypto exchanges then big traders would just move out and set their base in countries like Malta or Estonia like many have already done.

[Bitcoin Smith]

I did see this article and for a change I waited for someone to make a thread this time.


Blocking URLs is enough? Our cyber knowledge or the leaders are that much lame.

If they actually want the exchanges to stop Indian from using their exchange or comply AML policies then they should make them but banning url is not going to do anything because we knew how to use VPN very well.

[libert19]

I dunno url ban would do much, there are plenty ways to circumvent around that.

It would be better if government would try to bring proper and reasonable tax rules for crypto than try to curb it down with such stuff.

I did see this article and for a change I waited for someone to make a thread this time.

I was aware of it but didn't think it was worth to post because url ban, lol.

[Bureau]

Ban the URL is a way of saying ban the application and the online access to these exchanges. I have not been able to find out when will this ban happen. I am only getting information that these 8 exchanges need to comply with AML policy and if not then they will place the ban. A ban in this age of the internet is never possible as there is always another way to access those URLs. So the government ban will not work unless they ban the internet in India or the exchange stops onboarding Indian crypto users.

[TheUltraElite]

LOLz the government here is like lets ban the URL and nobody can access it. They forget what Proxies, VPNs are and how TOR can also be used to bypass all such rules. Previously we have had Porn ban and that only led to more VPNs running their businesses well in the country. Idiotic 8th standard fail politicians can even speak the C of crypto and they are making rules for the commoners.

However money laundering is rampant through crypto in India but this is not the method to control it.

[pakhitheboss]

The negative attitude of this Indian government is now coming out in open. AML policy for those exchanges which operates virtually and doesn't have a physical presence. Okay, now I understand, why Coinbase left India.

LOL 😂 what does url ban means? Are they even serious? Don't they know VPNs? Tiktok is still being used by Indian's after they banned it in India. You can find APK file for all banned applications, the exchange themselves would start asking Indian users to download and install it, if they ban url

I do feel that these 8 exchange would comply to the AML policy. They would then be asked by the government to provide the list of Indians using their platform as most of them have made KYC compulsary. But, MEXC does not ask for KYC for transaction upto 2 BTC, so if it agrees to AML policy still the government won't be able to get that user data. Then what will the government  do?

The actual reason for doing all this mumbo jumbo is to get those India user information. The government has made a significant loss of TDS as international exchange don't ask to 1% government cut in the name of TDS. They are now trying to find those guys and earn back what they lost.

[pawanjain]

LOLz the government here is like lets ban the URL and nobody can access it. They forget what Proxies, VPNs are and how TOR can also be used to bypass all such rules. Previously we have had Porn ban and that only led to more VPNs running their businesses well in the country. Idiotic 8th standard fail politicians can even speak the C of crypto and they are making rules for the commoners.

However money laundering is rampant through crypto in India but this is not the method to control it.

At least someone had a benefit out of this decision from the government i.e. VPN companies had a rise in traffic.
On the other hand, don't you think there's a little risk if we use VPN or Tor to access our crypto accounts ?
The traffic passes through these VPN tunnels and using Tor or other free VPNs might expose our data to them.
But anyway, I feel that these crypto exchanges will soon comply with AML policies now that the government had made the announcement.

[libert19]

LOLz the government here is like lets ban the URL and nobody can access it. They forget what Proxies, VPNs are and how TOR can also be used to bypass all such rules. Previously we have had Porn ban and that only led to more VPNs running their businesses well in the country. Idiotic 8th standard fail politicians can even speak the C of crypto and they are making rules for the commoners.

However money laundering is rampant through crypto in India but this is not the method to control it.

At least someone had a benefit out of this decision from the government i.e. VPN companies had a rise in traffic.
On the other hand, don't you think there's a little risk if we use VPN or Tor to access our crypto accounts ?
The traffic passes through these VPN tunnels and using Tor or other free VPNs might expose our data to them.
But anyway, I feel that these crypto exchanges will soon comply with AML policies now that the government had made the announcement.

That's true, but as long as you use reputed vpn providers, it shouldn't happen. ProtonVPN, Windscribe are few of good ones, I have personally used.

Also, I feel if crypto exchanges start banning vpn use, like casinos do, then things might turn out bit difficult for traders especially if they get caught.

[Bureau]

LOLz the government here is like lets ban the URL and nobody can access it. They forget what Proxies, VPNs are and how TOR can also be used to bypass all such rules. Previously we have had Porn ban and that only led to more VPNs running their businesses well in the country. Idiotic 8th standard fail politicians can even speak the C of crypto and they are making rules for the commoners.

However money laundering is rampant through crypto in India but this is not the method to control it.

At least someone had a benefit out of this decision from the government i.e. VPN companies had a rise in traffic.
On the other hand, don't you think there's a little risk if we use VPN or Tor to access our crypto accounts ?
The traffic passes through these VPN tunnels and using Tor or other free VPNs might expose our data to them.
But anyway, I feel that these crypto exchanges will soon comply with AML policies now that the government had made the announcement.

That's true, but as long as you use reputed vpn providers, it shouldn't happen. ProtonVPN, Windscribe are few of good ones, I have personally used.

Also, I feel if crypto exchanges start banning vpn use, like casinos do, then things might turn out bit difficult for traders especially if they get caught.

I don't think that exchanges in such a situation would ban VPN. They need that Indian user base and moreover I feel they would comply to the Indian government policy. They don't want to lose the volume Indian crypto users are generating on thier exchanges.

[kentrolla]

Ban the URL is a way of saying ban the application and the online access to these exchanges. I have not been able to find out when will this ban happen. I am only getting information that these 8 exchanges need to comply with AML policy and if not then they will place the ban. A ban in this age of the internet is never possible as there is always another way to access those URLs. So the government ban will not work unless they ban the internet in India or the exchange stops onboarding Indian crypto users.

Ban won't stop people from having access to these exchange but it would be difficult to cashout if you want as there might be hurdles if you want to convert crypto to fiat and ths would push people towards illegal steps hence government should consider all the possible reactions associated with it if they consider banning url, There is no need of taking this hasty step but stubborn government is not leaving any opportunity in killing Indian crypto industry which is bad news as India was once dominating this space.

[Bureau]

Ban the URL is a way of saying ban the application and the online access to these exchanges. I have not been able to find out when will this ban happen. I am only getting information that these 8 exchanges need to comply with AML policy and if not then they will place the ban. A ban in this age of the internet is never possible as there is always another way to access those URLs. So the government ban will not work unless they ban the internet in India or the exchange stops onboarding Indian crypto users.

Ban won't stop people from having access to these exchange but it would be difficult to cashout if you want as there might be hurdles if you want to convert crypto to fiat and ths would push people towards illegal steps hence government should consider all the possible reactions associated with it if they consider banning url, There is no need of taking this hasty step but stubborn government is not leaving any opportunity in killing Indian crypto industry which is bad news as India was once dominating this space.

Why would it be difficult? Most of the named crypto exchanges have P2P service for Indians. If anyone is able to access the exchange then they will be able use the P2P service of that exchange. I don't think that there would be an issue. The government decisions is justified if the matter is related to AML policy but the way they are doing it doesn't make any sense.

[TheUltraElite]

At least someone had a benefit out of this decision from the government i.e. VPN companies had a rise in traffic.

You dont say. The porn ban led to VPN gold run in India. People started knowing what a VPN is after that event.

On the other hand, don't you think there's a little risk if we use VPN or Tor to access our crypto accounts ?

I would not say there is no risk. But do we have any other choice?

But anyway, I feel that these crypto exchanges will soon comply with AML policies now that the government had made the announcement.

Indeed, and I hope that regulations will be such that it helps the common law-abiding citizen to transact without roadblocks and the criminals to get caught trying to exchange tainted funds.

[Bitcoin Smith]

I don't think that exchanges in such a situation would ban VPN. They need that Indian user base and moreover I feel they would comply to the Indian government policy. They don't want to lose the volume Indian crypto users are generating on thier exchanges.

We don't know what the Indian government is proposing in the name of AML and what if they are asking more than they are supposed to know and crossing the limits that no government tried to do?

If exchanges really care about the Indian user base then they might come around or just let the condition be and so people can keep using their service but former is the better for the future of cryptocurrency in India cause our government can highlight the same reason to ban the crypto if that is their ultimate goal.

[pawanjain]

I don't think that exchanges in such a situation would ban VPN. They need that Indian user base and moreover I feel they would comply to the Indian government policy. They don't want to lose the volume Indian crypto users are generating on thier exchanges.

We don't know what the Indian government is proposing in the name of AML and what if they are asking more than they are supposed to know and crossing the limits that no government tried to do?

If exchanges really care about the Indian user base then they might come around or just let the condition be and so people can keep using their service but former is the better for the future of cryptocurrency in India cause our government can highlight the same reason to ban the crypto if that is their ultimate goal.

What else are we providing other than KYC ?

The most they can extract out of the exchanges is the list of people who are into crypto, their KYC details and also the transactions they are making.
I mean, I know that's a lot of information in itself but I think exchanges should have a condition to give it only on requirement basis.
So that the government doesn't have direct access to that information and store it on their database but fetch it in cases of money laundering on requirement basis.
Government database is not very secure. There are cases where someone stole data from government database and sold it to other companies.
That's my major concern and the only way around it is if exchanges have some kind of usage access requirements for the government.

[Bitcoin Smith]

The most they can extract out of the exchanges is the list of people who are into crypto, their KYC details and also the transactions they are making.
I mean, I know that's a lot of information in itself but I think exchanges should have a condition to give it only on requirement basis.
So that the government doesn't have direct access to that information and store it on their database but fetch it in cases of money laundering on requirement basis.
Government database is not very secure. There are cases where someone stole data from government database and sold it to other companies.
That's my major concern and the only way around it is if exchanges have some kind of usage access requirements for the government.

No company is willing to provide all their financial activities to a foreign government because it exposes more thing than what they say to us so it can affect their progress and profit making. And you can expect a service provider to do such things when there isn't even a regulation from the country, so they should be working on the regulating frameworks before going after the exchanges.

[TheUltraElite]

Government database is not very secure. There are cases where someone stole data from government database and sold it to other companies.
That's my major concern and the only way around it is if exchanges have some kind of usage access requirements for the government.

Be assured that your data is probably already on the internet, so you have nothing to hide. The government's data leak is very common in India and recent events have made it very clear.

So whether giving KYC data to an exchange is safe or not? Chances are they already have that data and are only cross checking if you are telling the truth.

As long as you are law abiding citizen and are getting the crypto from clean sources, you should be fine. However this is a crude way of saying it.

[pawanjain]

Government database is not very secure. There are cases where someone stole data from government database and sold it to other companies.
That's my major concern and the only way around it is if exchanges have some kind of usage access requirements for the government.

Be assured that your data is probably already on the internet, so you have nothing to hide. The government's data leak is very common in India and recent events have made it very clear.

So whether giving KYC data to an exchange is safe or not? Chances are they already have that data and are only cross checking if you are telling the truth.

As long as you are law abiding citizen and are getting the crypto from clean sources, you should be fine. However this is a crude way of saying it.

Well, it's not just about getting KYC data but actually finding out who is owning how much.
May be their plan is to extract tax from these crypto investors and also find out those people who are evading tax.
Money laundering is what they are bringing forward but they will also catch those people who are evading tax, identify crypto scammers etc...
All in all this sounds like a positive move but the only problem is banning URLs won't be sufficient.
The government will find it difficult to catch these people without having any backup plan.

[Bureau]

Government database is not very secure. There are cases where someone stole data from government database and sold it to other companies.
That's my major concern and the only way around it is if exchanges have some kind of usage access requirements for the government.

Be assured that your data is probably already on the internet, so you have nothing to hide. The government's data leak is very common in India and recent events have made it very clear.

So whether giving KYC data to an exchange is safe or not? Chances are they already have that data and are only cross checking if you are telling the truth.

As long as you are law abiding citizen and are getting the crypto from clean sources, you should be fine. However this is a crude way of saying it.

Well, it's not just about getting KYC data but actually finding out who is owning how much.
May be their plan is to extract tax from these crypto investors and also find out those people who are evading tax.
Money laundering is what they are bringing forward but they will also catch those people who are evading tax, identify crypto scammers etc...
All in all this sounds like a positive move but the only problem is banning URLs won't be sufficient.
The government will find it difficult to catch these people without having any backup plan.

AML policy is important for the government. A lot of illegal activities get funding through crypto in these times. Another information they want get out of this shadow ban is to find out how many users have evaded tax. Then they will start sending them letters to pay the amount or face the law.

[pakhitheboss]

Does anyone have any updates on this topic? I searched today and found nothing on this topic. I am still able to access the exchanges on my phone without any issues. The problem with this government is that they do not keep its public updated. One fine morning they will wake up and place a ban before the community can come up with an alternative. I am sure many here would have some funds in one of these exchanges as I do for trading. If I am unable to access those funds then my BP will go high.