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OKX halts operations in India, citing regulatory hurdles

India is considering stricter regulations on cryptocurrencies, which could affect crypto exchanges and other crypto-related businesses.

Date: 2024-03-22 Author: Marek Stiller
OKX halts operations in India, citing regulatory hurdles

Cryptocurrency exchange OKX has sent an email to its users in India to inform them that it will discontinue its services there, urging them to withdraw funds by the end of April.

OKX was among nine foreign exchanges blocked in India after local regulators issued compliance notices.

OKX shuts down services in India

In a notice sent to Indian users on Thursday, March 21, OKX urged customers to close their accounts and withdraw funds before April 30.

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To justify the action, CEX cited local regulatory obstacles as the main reason for its decision. The notice said: “We regret to inform you that OKX is no longer providing services to users in India.”

As a result, OKX users in India have been instructed to close all margin positions, perpetual instruments, futures and options, and use funds from products such as Earn, Loan and Jumpstart before the April 30 midnight deadline.

In addition, OKX clients are advised to accelerate withdrawals before the deadline to avoid any losses. Moreover, the OKX exchange assures users that their funds will remain safe and available until they are withdrawn. The decision comes after the FIU asked the Ministry of Electronics and Information Technology to block the websites of the reported cryptocurrency exchanges within two weeks; OKX faced site and application blocks in January.

OKX says it failed to complete the registration process, despite trying to comply by applying for a new registration process and rigorous Know Your Customer checks after the website and app were blocked in January.

On December 28, 2023. India’s Ministry of Finance has informed several cryptocurrency exchanges such as Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex and Bitfinex of their illegal activities in the country.

Each exchange serving Indian customers has been forced to register as a “reporting entity” and make statements to the income tax authority under the FIU Directive. The Ministry of Electronics and Information Technology has issued an order to block the websites of these exchanges as a result of their non-compliance.

Cryptocurrency exchanges in India continue to face regulatory uncertainty.

On December 28, 2023. The FIU sent notices of non-compliance to several cryptocurrency exchanges, such as Binance, Kraken, Huobi and Gate.io, to collect financial information under the Anti-Money Laundering Act.

It is worth noting that OKX’s name was not mentioned in the public statement. Many international exchanges have not complied with Indian law, the FIU said, but some local exchanges, such as CoinSwitch and CoinDCX, have complied.

A few weeks after the Indian government issued a notice of non-compliance, the apps of cryptocurrency exchanges Binance, KuCoin, Bitget, Huobi, OKX, Gate.io and MEXC were blocked from the Apple App Store and Google Play Store in India.

After nearly four years of discussion, the Indian government has not established official rules to regulate the burgeoning cryptocurrency market. Industry players were unsure of their rights and responsibilities in the country due to the lack of clarity.

To make matters worse, India’s tax system levies a 1% withholding tax (TDS) on every cryptocurrency transaction and imposes a hefty 30% tax on cryptocurrency income with no provisions for offsetting losses. The stringent tax laws have prompted many well-known entrepreneurs to relocate their businesses.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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