Crypto-exchange OKX shuts down services in India: Report

Cryptocurrency exchange OKX has informed its customers that it will discontinue services in India, urging them to withdraw their funds from the exchange by April 30, according to a report by MoneyControl. This comes after the Financial Intelligence Unit (FIU) wrote to the IT Ministry, directing it to block the URLs of nine offshore cryptocurrency platforms (including Binance, Kucoin, and Kraken) for non-compliance with India’s Prevention of Money Laundering Act, 2002 (PMLA) in December last year. As per Moneycontrol’s report, OKX got its website blocked in India on January 12.

What are the regulatory requirements for crypto platforms in India?

In March 2023, virtual digital asset service providers (crypto companies) were included in the Anti Money Laundering/Counter Financing of Terrorism framework under the PMLA. As per this framework, anyone providing crypto exchange services was required to register with the FIU. Registrants were required to disclose the account details of the banks/ financial institutions where they held accounts for transactions and the money of their clients.

Crypto Companies also had to fulfil a range of criteria including compliance with robust know-your-customer (KYC) requirements, relying on users’ Permanent Account Number (PAN) or National Identity Number and official valid documents. Crypto exchanges also had to meet enhanced due diligence norms, which require them to examine the background and purpose of all complex, unusually large transactions, and all unusual patterns of transactions, that have no apparent economic or lawful purpose.

Based on a response to a Lok Sabha question on December 4, 2023, the Ministry of Finance stated that 28 crypto companies had registered with the FIU. OKX was notably absent from the list of companies that had registered themselves. Earlier in March 2023, a CoinGeek report revealed how the crypto company shut down business in Canada because of tightened regulations.

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