OKX Ceases Operations in India, Citing Regulatory Challenges

Cryptocurrency exchange OKX has notified its users in India via email about the discontinuation of its services in the country, urging them to withdraw their funds by the end of April.

OKX Announces Cessation of Services in India, Citing Regulatory Hurdles

OKX sent out a notice to its Indian users on Thursday, March 21, informing them of the cessation of its services in India and advising them to close their accounts and withdraw their funds before April 30. The exchange cited regulatory hurdles in the local environment as the primary reason for this decision, stating, "We regret to inform you that OKX is no longer providing services to users in India."

Source: OKX

Users were instructed to close all margin positions, perpetuals, futures, and options, and to withdraw funds from products such as Earn, Loan, and Jumpstart before the specified deadline to avoid any potential losses. OKX assured its users that their funds would remain safe and available for withdrawal until the deadline.

OKX Ceases Operations in India Amid Regulatory Uncertainty and Website Blocks

The decision to cease operations in India comes after the Financial Intelligence Unit (FIU) requested the Ministry of Electronics and Information Technology to block the websites of several notified crypto exchanges, including OKX, within a two-week period. OKX had previously faced website and application blocks in January. Despite attempts to comply by initiating a new registration process with stringent Know Your Customer checks, OKX's notice suggests it was unable to complete the registration process successfully.

The regulatory landscape for cryptocurrency exchanges in India has been fraught with uncertainty. The FIU's directive in December 2023 required exchanges serving Indian users to register as reporting entities and submit statements to the income tax department. Failure to comply led to recommendations for website blocks by the Ministry of Electronics and Information Technology.

Uncertainty and Tax Hurdles: Indian Cryptocurrency Exchanges Grapple with Regulatory Challenges

Cryptocurrency exchanges operating in India have faced challenges due to the lack of clear regulatory guidelines and government actions. Despite ongoing discussions spanning nearly four years, the Indian government has yet to establish a formal regulatory framework for the crypto market. This uncertainty has left industry players unsure about their legal obligations within the country.

Furthermore, stringent tax regulations, including a 30% tax on crypto income without provisions for offsetting losses and a 1% tax deducted at source on each transaction, have prompted some established players to relocate their operations to other jurisdictions.