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OKX, a prominent crypto exchange renowned for its high trading volume, is discontinuing its services in India due to regulatory obstacles in the country. The exchange, headquartered in the Seychelles, has notified its Indian users to close their accounts and withdraw their funds before April 30.
In an email communication to its users, OKX stated that customers are required to close all margin positions, including perpetuals, futures, and options. After April 30, all other services will be suspended, and only fund withdrawals will be allowed.
Meanwhile, OKX is expanding its operations in other regions, having obtained licenses in Singapore and Dubai and initiating trading with the local currency in Turkey.
In March 2023, digital asset service providers were included in India's anti-money laundering framework. To operate in India, exchanges must register with the Financial Intelligence Unit India (FIU IND) and adhere to regulations. However, by the end of 2023, OKX had not completed registration, unlike 28 other companies.
In December, the FIU IND issued a notice to nine exchanges, including Binance, Kraken, and MEXC Global, Kucoin, Huobi, Gate.io, and Bittrex, for illegal operations. Notably, OKX was not among the listed exchanges. Some of the exchanges that received notices have initiated discussions with Indian authorities.
Despite the recent surge in Bitcoin prices and institutional adoption of crypto in the US market, crypto exchanges are encountering difficulties operating in the Indian market. Binance is facing partial restrictions in India, while global exchanges such as Coinbase and Koinex, along with Indian-origin companies like Pillow and Flint, have already ceased operations in the country.
India's leading crypto unicorns, including CoinDCX and CoinSwitch, have also faced challenges in the past year, with reports of layoffs and cost-cutting measures. Both companies experienced a notable decline in operating revenue in FY23.
OKX's decision to cease operations in India reflects the challenges faced by crypto exchanges amidst regulatory complexities. Despite these hurdles, OKX remains resilient, expanding its presence in other regions while navigating regulatory hurdles. On the flip side, a foreign exchange halting its operations in India represents a positive development for domestic exchanges. As the crypto industry evolves, exchanges like OKX continue to adapt to regulatory changes and explore new opportunities for growth.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash
