India has tightened its noose around crypto-related businesses, mandating sector firms to comply with certain legal requirements. Failing to comply with these rules, crypto exchange OKX has decided to exit India’s crypto sphere. The Seychelles-headquartered exchange informed its Indian community on March 21 that they should close their accounts on the platform before April 30. OKX entered the Indian market between August and November last year. The company has been in business since 2017 and was founded by Star Xu.
The OKX team has issued a notice to Indian community saying that the exchange is no longer providing services in India.
“Due to local regulations, you need to close all margin positions, as well as positions in perpetuals, features, and options. Redeem all funds from Grow products,” the exchange said in its notice.
Starting April 30, accounts held by India-based people on OKX will be restricted. While they will still be allowed to withdraw funds, all other functions will be rendered defunct.
“Your funds will remain safe and available in your account until you withdraw them,” the exchange noted.
As of now it remains unclear if OKX’s exit from India’s crypto space is temporary until the company comes in compliance with the rules or if it’s making a long-term exit. India’s financial authorities, in order to make the crypto sector secure for people to engage with, is adding layers of regulations for sector players to comply with.
In December 2023, the Financial Intelligence Unit India (FIU) issued show cause notices to nine offshore companies asking them to show evidence that they were following all of India’s rules. These companies are — Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
The FIU and the finance ministry of India are trying to ensure that all crypto-related firms are following the Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023. Soon after the announcement, the Binance and Kraken apps disappeared from Apple’s App Store and Google’s Play Store in India.
In the times to come, India is expected to deploy more layers of rules over the crypto sector following the regulatory roadmap finalised by the G20 group last year.