OKX terminates services in India, asks users to withdraw funds by April 30

[Oshosondy]

We all know that India has been unfriendly with foreign crypto exchanges some months ago till now. These exchanges websites have been banned and Indians can not access their websites without VPN. Also that Google Playstore and Apple Appstore have delisted the apps of these exchanges beyond the access of Indian users.

What is happening now is that OKX among the exchanges is telling its Indian users to withdraw their money and coins on the exchange before April 30.

In a notice sent to Indian users on March 21, OKX asked users to close their accounts and redeem funds before April 30. The crypto exchange cited local regulatory hurdles as the key reason behind the decision.

https://cointelegraph.com/news/okx-terminates-services-india-tells-users-withdraw-funds

We are going to see more exchanges that will follow OKX soon.

[Husires]

Cryptocurrency regulations in India have been mixed over the years but since January and the tightening of KYC, it was expected that Indian users would be banned. In the past, 3 to 6 months were given, where trading was frozen with immediate effect, with the possibility of withdrawing funds during that period.
Allowing a withdrawal period of about a month or a little more may not be sufficient, especially if there is a large number of users.

[sokani]

The news of OKX leaving India doesn't come to me as a shocker. Sometimes last year, Coinbase disabled sign-ups for indian customers. Also, last year, the Indian Financial Intelligence Unit issued a compliance notice to 9 exchanges, citing their operations illegal and having their websites blocked.

Since the local exchanges are still operational, I don't want to believe the global exchanges cannot afford the license fees or they don't want to comply to regulations. The only thing that makes sense is that their services are not wanted and I expect most of them to start packing their bags soon.

[tabas]

I thought that India has 30% of taxes from crypto profits and that means that they're welcoming any development of businesses and services that will happen there. But as I have read some info about this termination of their support and service to their Indian users, one main reason - local regulations. Well, that's confusing to think if there's a designated percentage of taxation for crypto profits and then now this. What soon? the discontinuation of other exchanges that are operating mainly outside their country and they'd still allow exchanges like zebpay that's originated from their country? as said, they're the major exchange that's regulated and complied to the regulators.

[Z-tight]

The FIU (financial intelligence unit) in India had declared some months ago that most cryptocurrency exchanges are operating illegally, so it seems to me that many of these exchanges have not yet registered with this authority in order to get the license to operate in that jurisdiction, and as things stand, it is either they comply or leave. OKX is leaving now and i am sure many more would leave the Indian market as well.

Indian customers would have to seek alternatives elsewhere, they can either use recommended p2p exchanges or use local exchanges that have registered with the FIU and are free to operate.

[Potato Chips]

I thought that India has 30% of taxes from crypto profits and that means that they're welcoming any development of businesses and services that will happen there. But as I have read some info about this termination of their support and service to their Indian users, one main reason - local regulations.

I actually think of the 30% tax as a part of a soft ban because it's too much of a dent to traders. IIRC, soon after this was imposed, more than half of the volume from their local exchanges went to global exchanges with laxer KYC policies because the locals thought they could circumvent the huge tax imposed on them thru such means.

If the Indian govt is imposing such burden to their local traders, it's safe to assume exchange operators could be experiencing pressures as well. Although the indian market has a great potential, it's just one market out of the many countries global exchanges are serving. In addition, a lot of global exchanges are off-shore businesses that wants laxer policies as much as possible.

In a notice sent to Indian users on March 21, OKX asked users to close their accounts and redeem funds before April 30. The crypto exchange cited local regulatory hurdles as the key reason behind the decision.

BTW, I could not access the article from your link. It's missing an extra 's', see: https://cointelegraph.com/news/okx-terminates-services-india-tells-users-withdraw-funds

[tabas]

I thought that India has 30% of taxes from crypto profits and that means that they're welcoming any development of businesses and services that will happen there. But as I have read some info about this termination of their support and service to their Indian users, one main reason - local regulations.

I actually think of the 30% tax as a part of a soft ban because it's too much of a dent to traders. IIRC, soon after this was imposed, more than half of the volume from their local exchanges went to global exchanges with laxer KYC policies because the locals thought they could circumvent the huge tax imposed on them thru such means.

If the Indian govt is imposing such burden to their local traders, it's safe to assume exchange operators could be experiencing pressures as well. Although the indian market has a great potential, it's just one market out of the many countries global exchanges are serving.

I agree, OKX probably have been pressured because it's either that the local exchanges have been complaining to their government that the volume that should be on them went to the global markets. So, as part of regulations and benefits, instead of those going to their economy and local exchanges, it is circulating globally that's being distributed somewhere.

In addition, a lot of global exchanges are off-shore businesses that wants laxer policies as much as possible.

Definitely. They want to no dramas and that much restrictions. I think they have no problems at all with regulations but if it's too much for them that's being asked by the local government where they're operating, they just can't give that much and has to leave that market as they've got some other markets that they can also get that lost volume from that disposed region.

[bbc.reporter]

What is happening now is that OKX among the exchanges is telling its Indian users to withdraw their money and coins on the exchange before April 30.

We are going to see more exchanges that will follow OKX soon.

Hehehe they will certainly have much regrets on making this decision because they cannot stop the people from connecting to the cryptospace through wallets similar to Metamask then connect to DeFi. Another argument is China will begin to open their jurisdiction to the cryptospace again and encourage development of Chinese projects to compete against the western projects. Where will India be in this new world of development and financial competition? Traditional investors have begun accepting the cryptospace in America through the ETF, China might be next through Hong Kong and later Shanghai, however, India is closing their jurisdiction? This is very headshaking. They might open it on the wrong time and they will become exit liquidity hehehehe.

[hugeblack]

I agree, OKX probably have been pressured because it's either that the local exchanges have been complaining to their government that the volume that should be on them went to the global markets. So, as part of regulations and benefits, instead of those going to their economy and local exchanges, it is circulating globally that's being distributed somewhere.

A complete ban does not benefit all parties (government, crypto exchanges, local traders, investors), so governments resort to directing investors either to stay away from the market by imposing high taxes or to force them to use local exchanges where deposits can be guaranteed, legal compliance, taxes paid, and all regulations are guaranteed. For this to happen, international exchanges must ban users.

I just hope that such legislation does not push investors to try anonymous non-KYC platforms or with low trading volumes, which may lead to scam for some and loss for others.

[Rikafip]

We are going to see more exchanges that will follow OKX soon.

We didn't have to wait long for more news as Bybit app has been removed from Apple App store for Indian users so I woulnd't be surprised if they get out of Indian market in the near future.

Source https://coingape.com/bybit-app-disappears-from-apple-app-store-in-india/

Its never boring for crypto enthusiasts from India. 

[tabas]

I agree, OKX probably have been pressured because it's either that the local exchanges have been complaining to their government that the volume that should be on them went to the global markets. So, as part of regulations and benefits, instead of those going to their economy and local exchanges, it is circulating globally that's being distributed somewhere.

A complete ban does not benefit all parties (government, crypto exchanges, local traders, investors), so governments resort to directing investors either to stay away from the market by imposing high taxes or to force them to use local exchanges where deposits can be guaranteed, legal compliance, taxes paid, and all regulations are guaranteed. For this to happen, international exchanges must ban users.

This seems to be happening in most of the countries that have been crypto friendly but then, such pressure and factors that affected the operation of their local exchanges and even the benefit that should be for government really pushed them to do so. That taxation that has been made rounds is truly like a shadow ban.

I just hope that such legislation does not push investors to try anonymous non-KYC platforms or with low trading volumes, which may lead to scam for some and loss for others.

Well, we can't stop those users/investors that will try and find a way to get into those platforms and are thinking of avoiding these matters. It's just hard that many of us have got choice but those choices seemed forced to the users from these specific countries.

[Darker45]

Rather than seeing many more exchanges following OKX, it seems OKX is actually the one that is following the fate of Binance, Huobi, Bitstamp, Kraken, KuCoin, Bittrex, Bitfinex, and others. It seems all the big names have already gone ahead.

But there's supposed to be a regulatory framework to be released this year. I hope it will be on time and more or less fair to exchanges. They might come back considering the size of the market in India, once this is released for their compliance. One requirement that seems interesting is the "real-time proof-of-reserve audits." This a strong regulatory protection for their clients.

[bbc.reporter]

@Darker45. If that is true and if we are being fair on the Indian government, they might want to start the regulations on the cryptospace from zero. They will first ban all exchanges, create a regulatory template that you mentioned, then begin accepting exchanges under the rules of the template. This might not be a bad roadmap hehe. However, the small projects with anonymous developers of DeFi will be their problem. They will certainly not follow the rules imposed by the regulatory template.

[Darker45]

@Darker45. If that is true and if we are being fair on the Indian government, they might want to start the regulations on the cryptospace from zero. They will first ban all exchanges, create a regulatory template that you mentioned, then begin accepting exchanges under the rules of the template. This might not be a bad roadmap hehe. However, the small projects with anonymous developers of DeFi will be their problem. They will certainly not follow the rules imposed by the regulatory template.

Here's the article which was published December of last year. The regulatory framework I was talking about is mentioned there.

To be fair, if I were the Indian government, I would have done the same. India offers such a huge market, the top country as per "Chainalysis’ global crypto adoption index of 2022," but how are they benefitting from the profitable operations of Binance, Kraken, KuCoin, and others? These top exchanges are illegally operating. Why should they be allowed to do that?

So, perhaps the right way is for the government to subject them all to regulations. It's either they comply or perish. At the end of the day, these are private companies, centralized entities that should be held accountable for what they're offering to Indian citizens.

[stompix]

@Darker45. If that is true and if we are being fair on the Indian government, they might want to start the regulations on the cryptospace from zero. They will first ban all exchanges, create a regulatory template that you mentioned, then begin accepting exchanges under the rules of the template. This might not be a bad roadmap hehe. However, the small projects with anonymous developers of DeFi will be their problem. They will certainly not follow the rules imposed by the regulatory template.

Here's the article which was published December of last year. The regulatory framework I was talking about is mentioned there.

To be fair, if I were the Indian government, I would have done the same. India offers such a huge market, the top country as per "Chainalysis’ global crypto adoption index of 2022," but how are they benefitting from the profitable operations of Binance, Kraken, KuCoin, and others? These top exchanges are illegally operating. Why should they be allowed to do that?

So, perhaps the right way is for the government to subject them all to regulations. It's either they comply or perish. At the end of the day, these are private companies, centralized entities that should be held accountable for what they're offering to Indian citizens.

So again, it's not oh, cries, OKX is leaving because it can't comply with the terms, it's OkX leaving because it doesn't want to do the basics to comply with the rules other companies in other fields do, what a surprise, they've got used to operating without a license, without tules, without caring about customers money now when they do have to do so they all flee.

Till date 31 VDA SPs have registered with FIU IND. However, several offshore entities though catering to a substantial part of Indian users were not getting registered and coming under the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework,” the document reads.

So 31 companies agreed, and 7 didn't and closed shop!
Let's go further:

The framework — scheduled to be released in 2024 — is likely to include advanced KYC rules for crypto companies and require the release of real-time proof-of-reserve audits. It’s also expected to propose a uniform tax policy across nations and bring crypto exchanges under the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India

Oh yeah, so they would need to show they have the customer's money and they would need to keep those coins separate, no wonder OKX fled.

[The Cryptovator]

India is a large country, and it does have a large number of crypto users. But the government seems not to be friendly enough for crypto users. Exchanges have to close their services when they can't comply with local rules. It seems that using centralised exchanges is becoming more complicated everywhere. Because each local government has its own standards and regulations, We should start using decentralised exchanges and not depend on centralised exchanges. 

[electronicash]

India is a large country, and it does have a large number of crypto users. But the government seems not to be friendly enough for crypto users. Exchanges have to close their services when they can't comply with local rules. It seems that using centralised exchanges is becoming more complicated everywhere. Because each local government has its own standards and regulations, We should start using decentralised exchanges and not depend on centralised exchanges. 

the problem with this one is that the local fiat which the decentralized exchanges doesn't have p2p. this is the basics that people need to use for crypto is not widely accepted still to buy local goods.

if the local merchants only accept BTC or even just USDT, then it may not be a problem anymore to buy something. there may be a large number of people using crypto in India but grocery stores and service providers only accept Rupee.

[bbc.reporter]

@Darker45. If that is true and if we are being fair on the Indian government, they might want to start the regulations on the cryptospace from zero. They will first ban all exchanges, create a regulatory template that you mentioned, then begin accepting exchanges under the rules of the template. This might not be a bad roadmap hehe. However, the small projects with anonymous developers of DeFi will be their problem. They will certainly not follow the rules imposed by the regulatory template.

Here's the article which was published December of last year. The regulatory framework I was talking about is mentioned there.

To be fair, if I were the Indian government, I would have done the same. India offers such a huge market, the top country as per "Chainalysis’ global crypto adoption index of 2022," but how are they benefitting from the profitable operations of Binance, Kraken, KuCoin, and others? These top exchanges are illegally operating. Why should they be allowed to do that?

So, perhaps the right way is for the government to subject them all to regulations. It's either they comply or perish. At the end of the day, these are private companies, centralized entities that should be held accountable for what they're offering to Indian citizens.

They are not operating illegally, only in the grey area hehehe. They do not have the laws created to legally put Binance executives in prison or to fine them. This is why they will impose a new regulatory template on them. My only wish is they will not follow what the roadmap being created by the cretins in the American government where want to KYC your wallets and want to make your transactions and trades through registered brokers. I have argued about this many times in the forum, however, this does not appear to be killing self custody for some people.

[stompix]

India is a large country, and it does have a large number of crypto users. But the government seems not to be friendly enough for crypto users.

And the crypto users didn't do a thing!

I find it ironic how one time we'll all about taking power from the government, Bitcoin replacing that and that, how the government can't take this and that away from you, how everything is unstoppable, and when it's the moment to act, to protect the same things you will die on a hill for it...the whole country went crickets!
There were supposed to be 10% owners of crypto in India, 140 million, yet to every single decision by either the government or the CV I haven't seen a protest, angry tweets not being protests!
Same with Nigeria, again we would have had 20 million according to some research, where were those people? Where were the petitions, the demand for change? Crickets!

So, with no opposition, they will do as they like since they don't feel threatened at all for one second!

[hugeblack]

So 31 companies agreed, and 7 didn't and closed shop!
Let's go further:

The framework — scheduled to be released in 2024 — is likely to include advanced KYC rules for crypto companies and require the release of real-time proof-of-reserve audits. It’s also expected to propose a uniform tax policy across nations and bring crypto exchanges under the same status as authorized dealers (similar to banks) under the guidelines of the Reserve Bank of India

Oh yeah, so they would need to show they have the customer's money and they would need to keep those coins separate, no wonder OKX fled.

Kucoin succeeded where OKX failed, it seems they really want to leave the Indian market otherwise I think they can comply with the same regulations.
Either the Indian market is not attractive to this degree, or proving reserves is the reason for abandoning the market. Day after day, regulatory procedures will tighten, and if they are hiding something, they will soon stop working.