OKX cryptocurrency exchange will be discontinuing its services in India, closing its operations nearly three months after receiving compliance notices from the Financial Intelligence Unit (FIU) of the Indian Ministry of Finance. In a notice sent to Indian users on March 21, OKX urged users to close their accounts and withdraw their funds before April 30. The exchange attributed this decision to the regulatory challenges it faced in the country.
Following the FIU’s request, the Ministry of Electronics and Information Technology was instructed to block the websites of the nine foreign crypto exchanges that received compliance notices within two weeks. OKX had already experienced website and application blockages in January, prompting the implementation of a new registration process involving stringent Know Your Customer checks. However, the recent notice to users implies that OKX will no longer operate in India.
India poses difficulties for foreign crypto exchanges due to the lack of clear regulatory guidelines and strict government actions, despite being a thriving market. Discussions surrounding a regulatory framework have been ongoing for almost four years, but the Indian government has shown no intentions of recognizing or subjecting the emerging crypto market to legal oversight.
Although there is no specified timeline for the implementation of formal crypto regulations in India, the heavy 30% tax on crypto income, without any provision for offsetting losses, along with a 1% tax deducted at source (TDS) on each crypto transaction, has compelled several established players to relocate their operations elsewhere.
In a recent interview, the Indian Finance Minister explained that crypto cannot be treated in the same way as fiat currencies, which is why the government has yet to establish a clear regulatory structure. However, this response aligns with the general stance of government bodies worldwide and does not address the specific need for clearer regulations in the crypto market, similar to those seen in traditional stock markets.
Cointelegraph has reached out to OKX for comment but has not yet received a response.