Google and Apple have removed several crypto exchange apps, including Binance and Kraken, from their India store following a notice from the Financial Intelligence Unit (FIU) of India.
The FIU had accused the exchanges of operating illegally in India and violating the anti-money laundering rules.
This comes after the FIU issued a show cause notice to these exchanges in late December 2023, asking them to explain why they should not be penalized for failing to register with the FIU as virtual digital asset service providers (VDA SPs).
According to the FIU, VDA SPs deal with virtual digital assets, such as cryptocurrencies, and offer services such as exchange, transfer, custody, or control of such assets.
VDA SPs must comply with the Prevention of Money Laundering Act (PMLA) of 2002, which mandates them to register with the FIU, maintain records, report suspicious transactions, and implement customer due diligence measures.
The FIU claimed that the nine offshore crypto exchanges had a substantial user base in India, but had not registered with the FIU or followed the PMLA norms.
The FIU also alleged that the exchanges had facilitated money laundering, tax evasion, and terror financing activities through their platforms.
The crypto exchanges have not issued any official statement on the ban, but some of them have acknowledged the issue on their social media platforms.
Binance, for instance, tweeted that it was aware of the IP block affecting its users in India and that it was working to resolve the situation. Binance also advised that it was only new users trying to access the Binance app on IOS or their website that were affected.
The ban is the latest setback for the crypto industry in India, which has faced regulatory uncertainty and hostility from the government.
The Reserve Bank of India (RBI) imposed a ban on crypto transactions in 2018, which was later overturned by the Supreme Court in 2020.
However, the government has been considering a new bill that could ban all private cryptocurrencies in India and create a central bank digital currency (CBDC) instead.
The crypto industry has been lobbying for a more favorable and clear regulatory framework in India, arguing that crypto can offer innovation, inclusion, and growth opportunities for the country.