India To Ban Global Virtual Digital Asset Service Providers Including Binance
The government of India is poised to block Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, among other global virtual digital asset service providers in India, for their disobedience to the instructions for registering under the Prevention of Money Laundering Act (PMLA). Binance is the largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies.
In March, the government mandated VDA providers to register with the Financial Intelligence Unit (FIU) and complete compliance requirements under PMLA, such as reporting and record-keeping, after bringing them into the ambit of anti-money laundering services.
Following the companies” failure to execute the mandate, the FIU issued compliance show cause notices against the nine offshore entities and urged the electronics and IT ministries to block the URLs of their respective firms. According to the report, these foreign outfits are operating illegally, challenging the instructions of the government.
“To date, 31 VDA service providers have registered with FIU. However, several offshore entities, though catering to a substantial part of Indian users, were not getting registered and coming under the anti-money laundering and counter-financing of terrorism framework,” an official statement said.
Earlier, the Supreme Court rejected a plea seeking guidelines to regulate cryptocurrency mining and trading, saying that the solution to the plea requires legislative direction.
The Reserve Bank of India (RBI) is highly critical of cryptocurrencies, saying that they lack inherent value, unlike banknotes. Moreover, cryptocurrencies can be misused by terrorist organizations and anti-national groups because they lack a centralized regulatory system. Cryptocurrencies are virtual currencies, and their ownership is stored on decentralised blockchains, which are distributed ledgers.
However, many investors who conduct trade through Binance expressed their disappointments over the decision, as according to them, Binance is more fast, convenient and trustworthy than Indian crypto exchanges such as Wazirx, Zebpay, etc.
However, some agreed that these companies were illegally collecting cash from bank accounts, despite India banning them from doing so. On the back of the FIU”s action against the companies, people expect an inevitable fall in crypto prices with investors expeditiously trying to swap the trading platforms. There is uncertainty prevailing over finding an alternative platform, they said.
Meanwhile, many experts raised concerns over the Indian government”s stringent action against crypto exchanges, as, according to them, being indifferent to advanced technologies like blockchain technology will affect India”s position as an emerging superpower.
