Is crypto banned in India? The use of cryptocurrency in India has been a topic of debate for some time now. With the recent issuance of show-cause notices to nine offshore crypto trading platforms, the question on everyone’s mind is: Is crypto banned in India? Let’s dig deeper and find out.
Cryptocurrency, a digital or virtual currency that uses cryptography for security, is gaining popularity worldwide, and India is no exception. However, the Indian government is concerned about the potential misuse of cryptocurrency for money laundering and terror financing. Therefore, they are taking steps to regulate the use of cryptocurrency in the country.
Is crypto banned in India: What happened?
On Thursday, the Indian government issued show-cause notices to nine offshore crypto trading platforms, including popular names like Binance, KuCoin, and Huobi. The notices were issued under anti-money laundering laws by the Financial Intelligence Unit of India (FIU IND), responsible for processing information on suspicious financial transactions.
According to the finance ministry, the platforms in question did not comply with the provisions of the anti-money laundering law. As a result, the government took action to block the web addresses.
What does this mean for the cryptocurrency industry in India?
The Indian government’s latest move has left many wondering whether cryptocurrency is banned. However, it is important to note that issuing show-cause notices and blocking web addresses does not necessarily mean a ban on cryptocurrency.
The Indian government is taking steps to regulate the use of cryptocurrency in the country. In March 2023, virtual digital asset (VDA) service providers were brought under the Anti-Money Laundering/Combating the Financing of Terrorism (AML-CFT) framework. This means that crypto platforms must register as reporting entities with the FIU IND and comply with certain obligations mandated by law.
The notifications to offshore crypto trading platforms are part of the government’s effort to ensure that all crypto service providers comply with the provisions of the Prevention of Money Laundering (PML) Act in India.
What’s next?
The Indian government is currently undergoing a peer review of its anti-money laundering and countering the financing of terrorism framework by the Financial Action Task Force (FATF), a UN organization. The review assesses the technical appropriateness of its recommendations and the effectiveness of India’s anti-money laundering and counter-terrorist financing framework.
In the meantime, crypto service providers must comply with the regulations set by the Indian government. As of now, 31 VDA service providers have registered with FIU IND. However, despite serving a significant portion of Indian users, several offshore entities have not been registered, leading to the issuance of show-cause notices.
Banned Indian crypto exchange list
The following crypto exchanges have been banned in India, according to the FIU’s show-cause notices:
It’s important to note that this list may not be exhaustive, and the Indian government may issue further notices or bans in the future.
To summarize, while recent actions by the Indian government have caused confusion over the legality of cryptocurrencies in the country, it is important to note that the issuance of show-cause notices and blocking of websites does not necessarily mean a ban on cryptocurrency.
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