In a significant move, the Apple App Store in India has recently taken action against several cryptocurrency exchanges, including major players like Binance, KuCoin, Bitget, Huobi, OKX, Gate.io, and MEXC.
This decision to block their applications for new users is a direct response to a notice issued by the Indian Ministry of Finance’s Financial Intelligence Unit (FIU), targeting nearly a dozen foreign non-registered crypto exchanges.
FIU’s Notice and Regulatory Compliance
The FIU notice, issued on December 28, 2023, pinpointed exchanges such as Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex, and Bitfinex for operating illegally in India.
One of the core requirements emphasized in the notice is that any exchange providing services to Indian users must register as a “reporting entity” and comply with filing statements with the income tax department. The FIU recommended the blocking of these exchanges’ websites for noncompliance.
The FIU had been engaged in several moves to sanitize the crypto space and prevent fraudsters from using the platforms for drug transactions and other illegality.
Apple Inc’s App Store Response and Restricted Access
As a direct consequence of the FIU notice, Apple’s App Store in India has restricted access to the applications of the notified crypto exchanges, effectively preventing new users from downloading them.
This proactive step aligns with the FIU’s recommendation and demonstrates Apple’s commitment to ensuring regulatory compliance within the cryptocurrency space. However, it’s noteworthy that despite this restriction on the Apple App Store, the mentioned exchanges continue to be available on Google’s Play Store and through web versions.
Broader Regulatory Landscape in India’s Cryptocurrency Sector
This recent action by Apple’s App Store is part of broader efforts by Indian authorities to regulate and enforce compliance within the cryptocurrency sector.
The Indian government had previously imposed a 30% tax on crypto transactions and a 1% tax deduction at source for every crypto trade, leading to a notable decline in trading volumes on local exchanges. Subsequently, Indian users sought refuge in foreign crypto exchanges to navigate the stringent tax regime.
The move by Apple’s App Store underscores the growing demand for clear regulations in the Indian crypto space. Despite calls from the crypto community for a balanced regulatory framework, the Indian finance ministry has yet to introduce a comprehensive crypto bill in parliament.
This development aligns with the government’s overarching efforts to ensure compliance and bring foreign exchanges operating in India under regulatory scrutiny. However, new Crypto exchanges like OKX recently entered the Indian space despite the national cryptocurrency market’s regulatory ambiguities and difficulties.