Indian cryptocurrency exchanges are stepping up to offer smooth transitions for users looking to transfer their crypto assets from foreign exchanges, following a ban by India’s Ministry of Finance Financial Intelligence Unit (FIU) on offshore crypto exchanges like Binance, OKX, and others.
Several Indian exchanges have introduced attractive incentives to facilitate these transfers. CoinDCX, a leading Indian crypto exchange, announced a $1 million fund to assist users in moving their assets to compliant exchanges. This move comes in response to an estimated $4 billion invested in offshore exchanges by Indian investors, who are now seeking secure and compliant platforms for their crypto activities. Sumit Gupta, CEO of CoinDCX, reported a 2000% increase in new inflows in the week following the issuance of show cause notices to non-compliant entities. CoinDCX is offering a 1% bonus and secure deposit routes to ensure a smooth transition for these users.
BuyUcoin, another Indian exchange, announced zero-fee transfers for users moving their assets from offshore exchanges. Shivam Thakral, CEO of BuyUcoin, views the FIU’s move as a positive step towards investor protection and enforcing capital flight rules on foreign exchange entities.
WazirX, also a prominent Indian exchange, is offering a 1% bonus to users transferring their crypto to their platform. Rajagopal Menon, vice president of WazirX, welcomed the FIU’s actions, noting that foreign exchanges had been benefiting at the expense of Indian exchanges due to regulatory and tax differences. WazirX has seen significant increases in P2P transactions, spot trading volume, and deposits since the FIU notice.
The FIU issued non-compliance notices to several major foreign exchanges, including Binance, Huobi, Kraken, and others, on December 28, 2023. They were given a week to respond, with the IT department advised to block the URLs of these exchanges if they failed to comply.
Following the FIU notice, Apple’s Indian app store blocked all foreign crypto exchange apps, with Google’s app store following suit within a week. This led to panic among Indian users, many of whom had turned to foreign exchanges like Binance to avoid India’s 30% crypto tax.
While some Indian crypto influencers suggested using virtual private networks to access the banned platforms, BuyUcoin warned against this, citing risks of phishing sites and other online scams.
In response to the FIU’s actions, OKX reportedly began asking Indian users to update their personal information to comply with local regulations, indicating a move towards FIU compliance.
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