India’s cryptocurrency market faces another setback as OKX, one of the prominent international exchanges, announces its withdrawal from the country.
In a recent directive issued to its Indian users, OKX instructed them to liquidate their holdings and close their accounts by April 30, citing the challenging regulatory environment as the primary reason for its departure.
This decision by OKX comes amidst ongoing uncertainty surrounding cryptocurrency regulations in India. Nearly three months ago, the Financial Intelligence Unit (FIU) issued compliance ultimatums to nine international cryptocurrency exchanges, signaling increased scrutiny from regulatory authorities.
In response, OKX and other exchanges implemented enhanced Know Your Customer (KYC) procedures to ensure compliance with regulatory requirements.
However, despite these efforts, OKX’s decision to exit the Indian market underscores the complexities and uncertainties faced by cryptocurrency exchanges operating in the country.
The absence of clear regulatory guidelines and the government’s stringent stance on cryptocurrencies have created a challenging operational environment for these entities.
India’s crypto industry has been in a state of limbo for nearly four years, with the government yet to establish a comprehensive regulatory framework for digital assets. The recent imposition of a 30% tax on crypto earnings, coupled with a 1% tax deducted at source (TDS) on every crypto transaction, has further exacerbated the challenges faced by exchanges operating in the country.
Finance Minister’s recent statements reaffirm the government’s cautious approach towards cryptocurrencies, emphasising the need for a nuanced regulatory framework that distinguishes digital assets from traditional fiat currencies. However, until such regulations are put in place, exchanges like OKX continue to grapple with uncertainty, leading to difficult decisions like withdrawal from the Indian market.
