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OKX Closes Shop in India, ByBit Vanishes from Apple Store Amid South Asia Crypto Crackdown

Last Updated March 22, 2024 1:05 PM
Shraddha Sharma
Last Updated March 22, 2024 1:05 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • OKX closes India operations due to regulatory hurdles, urging users to withdraw funds by April 30.
  • FIU IND previously issued notice against nine offshore exchanges, excluding OKX, for non-compliance.
  • ByBit has reportedly disappears from Apple App Store amid a crackdown on foreign exchanges in India.

The Seychelles-based OKX crypto exchange is shutting operations in India on the back of regulatory challenges in the country. The decision comes shortly after the exchange received approval to operate in Singapore, highlighting fragmented rules in Asia. Meanwhile, Apple users have reported that crypto exchange ByBit’s app has disappeared from the app store amid a foreign exchange crackdown in India.

Regulatory Hurdles Prompt OKX Exit

OKX informed its Indian users in an email that they need to close their accounts and withdraw funds by April 30. The exchange attributed this decision to regulatory hurdles in India. The email reads: “Your funds will remain safe and available in your account until you withdraw them.”

The exchange instructed its Indian users to close all margin positions, perpetual, futures, and options, and redeem funds from Earn and other products by the deadline. Following this, the exchange will restrict account access, allowing only fund withdrawals.

OKX did not immediately respond to a request for comment.

The development comes after the Financial Intelligence Unit India (FIU IND) released a notice  against nine offshore Virtual Digital Assets Service Providers (VDA SPs) for operating in India without adhering to anti-money laundering and counter-financing of terrorism regulations.

Notably, OKX was not among the exchanges that the government blocked for non-compliance after the Show Cause Notice. The list included Binance, Bitfinex, Huobi, Kraken, Gate.io, Bitstamp, Bittrex, MEXC Global and KuCoin.

In a separate report, Apple users report that they cannot access ByBit app on the Apple App Store. This underlines further crackdown on foreign exchanges in India. 

State of Crypto Regulation

Domestic exchanges and the industry advocacy group under the Bharat Web3 Association (BWA) have been asking for regulatory clarity and a level playing field.

Before the Show Cause Notice in December 2023 by FIU IND, they addressed the Finance Ministry. The industry asked to create a conducive environment for domestic exchanges as foreign players were not obligated by India’s taxation-related rules.

On the development, Rajagopal Menon, VP of Indian exchange WazirX, told CCN: “This was expected. The Indian Government’s stance on enforcing compliance with local laws by exchanges catering to Indian users has been clear.

“When initial regulatory actions targeted foreign exchanges, it caught many investors and traders off guard. However, this time around, the community was more prepared for such developments. It’s anticipated that more foreign exchanges will follow suit and cease offering services to Indian users in the near future, aligning with the government’s regulatory directives.”

CCN has also reached out to BWA on the closure of OKX in India. The story will be updated based on its comments. Previously, Coinbase hit a roadblock in India amid its Asia expansion.

India “Progressing” with Crypto

Sumit Gupta, co-founder of crypto exchange CoinDCX told CCN: “India is progressing towards a framework for responsible crypto adoption. This was evident in December 2023 with the FIU’s showcase notices, which include ensuring exchanges adhere to regulations such as the Prevention of Money Laundering Act (PMLA).

He added: “In the long run, compliant exchanges foster trust and confidence among investors, nurturing a healthier crypto ecosystem in India. In light of OKX informing its customers of discontinuing services to users in India due to local regulations, it’s evident that Exchanges operating in India are expected to be FIU -IND compliant.”

Menawhile, Singapore’s MAS has tightened regulatory measures for retail investors and to mitigate risks with speculation. However, the Monetary Authority of Singapore has recently provided in-principle approval to OKX.

India Keeping Private Players In Check

OKX’s decision to cease operations in India highlights the complex regulatory environment in the region. As governments seek to regulate the crypto market, India has tightened the compliance requirements for exchanges to maintain their operations. Meanwhile, its Asian counterpart in Singapore is allowing licensing under a strict framework.

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