Google Takes Down Binance and Other Crypto Exchanges’ Apps in India

Google has removed the applications of several global cryptocurrency exchanges, including Binance and Kraken, from its Play Store in India. This move follows the allegations of unauthorized operations made against these exchanges by the Financial Intelligence Unit (FIU) of the Indian Finance Ministry. 

The FIU issued show cause notices to nine offshore cryptocurrency exchanges, claiming they were engaged in unauthorized operations within India.

This ban by Google comes in the wake of a similar action taken by Apple earlier in the week, where the tech giant also removed these crypto apps from its App Store in India. 

Related Check: Apple App Store Takes Down Global Crypto Exchanges Apps In India

The exchanges affected by this removal include Binance, Kraken, Kucoin, Huobi, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfenex.

As the crackdown intensifies, Google has joined Apple in restricting access to these crypto apps, aligning with regulatory concerns about their operations in India. 

Regulatory Scrutiny and Anti-Money Laundering Allegations

The FIU, which scrutinizes financial transactions, had raised concerns about the compliance of these exchanges with India’s anti-money laundering rules. 

The agency had requested the Ministry of Electronics and Information Technology (MeitY) to block the URLs of these crypto exchanges within India. This regulatory action responds to suspected violations of Indian anti-money laundering regulations by the mentioned exchanges.

The FIU requires service providers dealing with virtual digital assets operating within India or beyond its borders to register with FIU India as a ‘Reporting Entity officially.’ 

However, several foreign entities, including the banned exchanges, have been evading registration, operating beyond the scope of the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework.

“As part of compliance action against the offshore entities, Financial Intelligence Unit India (FIU IND) has issued compliance Show Cause Notices to the following nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA).”

According to the FIU.

Tax Avoidance and Regulatory Arbitrage Dynamics

Apple and Google’s ban on crypto apps is part of a broader regulatory landscape in India, where cryptocurrency trading has faced historical scrutiny. India’s burdensome capital gains tax of 30% and a 1% transaction levy imposed in 2022 have led to many domestic cryptocurrency traders migrating to global platforms. 

These platforms often have less stringent know-your-customer protocols, leading to regulatory arbitrage.

The regulatory arbitrage and a broader market downturn have caused a substantial decline in trading activity on Indian exchanges like WazirX. Well-funded Indian platforms like CoinSwitch Kuber and CoinDCX, which demand rigorous identification verification, have faced the challenge of traders seeking less scrutinized international competitors, showcasing classic tax avoidance behavior, according to fiscal authorities.

The Indian government’s historically cautious stance on cryptocurrencies, despite the Supreme Court overturning the ban implemented by the Reserve Bank of India five years ago, continues to shape the dynamics of the crypto industry in the country.