OKX exits India’s crypto space as it does not meet legal requirements

India has tightened its noose around crypto-related businesses by requiring firms in the sector to comply with certain legal requirements. By not following these rules, the OKX crypto exchange has decided to leave the crypto sphere of India. The Seychelles-based 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 the Indian community that the exchange is no longer providing services in India.

“Due to local regulations, you must close all margin positions, as well as positions in perpetuities, features and options. Redeem all funds from Grow products,” the exchange said in a statement.

From April 30, accounts held by India-based people on OKX will be restricted. While they will still be able to withdraw funds, all other features will be rendered non-existent.

“Your funds will remain safe and available in your account until you withdraw them,” the exchange notes.

As of now, it remains unclear whether OKX’s exit from India’s crypto space is temporary until the company complies with the rules or is making a long-term exit. Indian financial authorities, in order to make the crypto sector safe for people to engage with, are adding layers of regulations that players in the sector must comply with.

In December 2023, India’s Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore companies, asking them to submit evidence that they were complying with all Indian rules. These companies are – Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.

The FIU and India’s finance ministry are trying to ensure that all cryptocurrency-related firms follow the Anti-Money Laundering and Anti-Terrorist Financing (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023 Soon after the announcement, Binance and Kraken apps disappeared from Apple’s App Store and Google’s Play Store in India.

Going forward, India is expected to introduce more levels of regulation in the crypto sector following the regulatory roadmap finalized by the G20 group last year.