- OKX crypto exchange is finally taking its leave from the Indian market and ending all its operations in the South-Asian country
- The exchange urges all users to begin closing trading positions before the end of April
- The decision to exit the Indian market is because of its inability to keep up with the country’s regulations
Top cryptocurrency exchange OKX has announced it will take its leave from the Indian market. The exchange sent a notice to all its Indian customers urging them to exit their market positions before an April 30 deadline to avoid losing their funds. This move follows the crackdown of the FIU (Financial Intelligence Unit), India’s finance watchdog, on crypto exchanges that are non-compliant with the country’s regulations.
Last December, the FIU issued a notice to nine offshore cryptocurrency exchanges operating in India including Binance, Kucoin, Huobi, Gate.io, and MEXC Global over non-compliance with money laundering laws.
Under the country’s laws, all cryptocurrency exchanges should comply with the Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT) framework of the Prevention of Money Laundering Act (PMLA). The country has been strictly policing global exchanges, blocking access to Binance, OKX, Kucoin, and other offshore exchanges over money laundering concerns.
OKX Users In India Required To Exit Positions Before April 30
OKX has advised customers in India to close all their active margin positions and withdraw all funds by April 30. The crypto exchange cited “local regulations” for its action.
Following the decision to exit the Indian market, OKX has sent out notices to all its customers in the country to exit all margin, perpetual, futures, and options positions and withdraw any remaining funds they have with the exchange before April 30.
According to the exchange, its actions are motivated by local regulations. The crypto regulatory landscape in India has tightened its regulatory requirements on offshore exchanges lately, which has triggered blockage of their mobile apps, locked-up user funds, and unprecedented exit plans.
In its notice to Indian customers, OKX says it will restrict users’ accounts to withdrawals only and block other functionalities.
India’s Regulatory Stringency on Foreign Exchanges Could Be For Tax Reasons, Says Inside Information
The Indian government’s crackdown might be for more personal reasons than just anti-money laundering compliance, according to inside information. According to the Economic Times, the “global cryptocurrency exchanges” which aren’t registered in the country are responsible for a “tax leakage of nearly Rs 3,000 crore” (30,000,000 Indian Rupees) annually.
India’s crypto tax structure mandates a 30% tax on all gains made from trading crypto assets along with a 4% cess. There’s also a 1% tax deducted at source on transferring crypto assets. These overarching tax requirements explain why most Indians prefer trading their crypto on global cryptocurrency platforms with minimal government control to evade the 1% tax.
However, with the recent crackdown on global exchanges, OKX’s exit, and the potential exit of other giant exchanges, the chances of evading those taxes are almost nonexistent. The Economic Times further reveals that nearly $4 billion of Indians’ crypto assets are held in offshore exchanges to “circumvent the 1% tax” with 80% of the funds held by Binance.